Why the decision to block the US Steel sale makes economic sense.
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** Biden Prepares to Block US Steel Acquisition
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The US Steel plant in Clairton, Pennsylvania, is part of the Pittsburgh metropolitan area, where the company is headquartered. (Photo by Jeff Swensen/Getty Images)
In a move that has caused an uproar since it was first suggested in April, the Biden administration is reportedly planning to block the sale of US Steel to Japanese company Nippon Steel. In a new blog post ([link removed]) , Roosevelt’s Todd N. Tucker breaks down why the administration opposes the takeover—and why that decision is economically strategic.
“When faced with a choice between upsetting labor or potentially upsetting an ally,” Tucker writes, “the working class needs to win—at least some of the time.” In keeping the company domestically owned and operated, the administration is choosing to side with workers over executives. The United Steelworkers union has alleged contract violations on the part of both Nippon and US Steel, and has also warned that in the case of market disruptions, the overseas company would likely shutter its US assets first. As Tucker writes, the president’s opposition to the merger demonstrates that “doing business in the US requires honoring workers and communities.”
The government also has a vested security interest in ensuring that domestic industries as critical as steel remain strong. “If the United States had hundreds of (zero carbon!) integrated steel plants, it would probably not make sense to spend much political capital blocking foreign acquisition of any one of them,” Tucker writes. But the actual total is just eight, with three of those plants owned by US Steel. “If there’s even a chance that a purchaser might idle one, it would cause immediate national and economic security problems.”
Read more in “By Siding with Steelworkers over C-Suites on US Steel Purchase, Biden Shows What a Foreign Policy for the Middle Class Looks Like.” ([link removed])
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