Outgoing United States president Joe Biden has blocked Japan鈥檚 Nippon Steel 鈥 the world鈥檚 fourth-largest steelmaker 鈥 from acquiring US Steel, ranked 24th globally and the third largest in the US, citing national security concerns.
Most financial observers thought the sale would be a good deal for the industry, given the company鈥檚 financial troubles.
Japan is a major US ally, supporting US military threats against China, US support for Israel鈥檚 genocidal war in Gaza and US sanctions and threats against Russia. Japan is also the largest foreign holder of US debt.
US Steel and Nippon Steel filed a lawsuit to support their deal, which dates back to 2023. The suit says that the government鈥檚 decision to block the sale is driven by domestic politics, not national security concerns.
Biden killed the deal, saying that US Steel should be owned by Americans as a national asset and that it is necessary for the country鈥檚 infrastructure and war machine.
Officials from the United Steelworkers of America (USW) praised Biden鈥檚 decision to block the acquisition, even though it could lead to more job losses.
It is strange that a company belonging to a strategic ally could be deemed to be a national security threat. Japanese and European companies already invest in many basic industries in the US.
Japanese Prime Minister Shigeru Ishiba asked Biden to allay concerns in the Japanese and US business communities over his decision.
Biden has always been a Cold War warrior and promoter of 鈥淎merica First鈥 policies. As a senator, he supported President George W Bush鈥檚 invasion of Afghanistan and Iraq and the War on Terror.
Incoming President Donald Trump has similar views, summed up in his 鈥淢ake America Great Again鈥 slogan.
The US ruling class and its two parties 鈥 Democrats and Republicans 鈥 agree on expanding US imperialist domination. The rhetoric and tactics may vary.
Biden鈥檚 decision to stop the sale is consistent with his own tariffs and sanctions against 鈥渆nemies鈥 like China and Russia.
Who wins? The political elites, who oppose globalisation and any economic bilateralism that doesn鈥檛 give a superior position to the US. It鈥檚 why Trump is promoting across-the-board tariffs against allies such as Canada and Mexico.
Who suffers? The working class. There is a continuity between Biden and Trump.
So, what explains the USW鈥檚 support of Biden鈥檚 anti-Nippon Steel decision? The officials know US Steel is in financial trouble and decline, with jobs and benefits at stake.
USW International President David McCall said the union 鈥渨elcomes鈥 the decision and has 鈥渘o doubt that it is the right move for our members and our national security鈥.
McCall said that over the past year, as the proposed acquisition was under review, 鈥渙ur union鈥檚 first and only concern has been the long-term viability of our facilities as we look to ensure a strong domestic steel industry well into the future鈥.
Many workers don鈥檛 see it that way. Since US Steel owners have downsized, jobs have been lost, and more will be lost without the deal.
Under US labour law, change of ownership does not abrogate existing contracts. Nippon would have had to recognise the union.
Biden and Trump want more manufacturing inside the US. Keeping out foreign capital and raising tariffs on countries causes more inflation and hardships. But it can force allies and others to bend to Washington鈥檚 policies.
This is why Nippon Steel鈥檚 proposal was denied. It had nothing to do with 鈥渘ational security鈥, it was a power play.
The union officials see themselves as 鈥淎merica First鈥, not trade unionists first, even if it hurts their own members and the working class.
Rank and file steelworks at US Steel and other basic industries know making 鈥淎merica great鈥听does not necessarily give them more job security with better wages and benefits.
If there is a need to safeguard basic resources such as steel and oil, the government could simply nationalise these companies and make them public property. This would protect resources, jobs and unions.