Having served as an officer in the U.S. Army, it's always troubling to see election year politics directly undermine national security.
With the news that President Joe Biden has joined former President Donald Trump and potential spoiler Robert F. Kennedy, Jr. in signaling opposition to the U.S. Steel purchase by Nippon Steel, such an unfortunate example is happening at scale.
In their efforts to win the Rust Belt states this November, places which at one time led the world in steel and auto production, all three presidential candidates left standing are now trying to scuttle a deal that would help mitigate China's global dominance of the steel market.
Though it plays well with labor unions in states like Pennsylvania and Ohio, unwinding the $14.9 billion deal already reached between U.S. Steel and Nippon Steel would hurt America overall.
That's because our steel industry is just a shell of its former self while China now has the world's top steel producer, and six of the top ten. It produces over half of global steel. China's dumping of steel on U.S. markets to hurt our companies has been effective, pushing our companies down a steep slope.
Once the world's biggest steel company and the first U.S. corporation to reach over $1 billion in value in 1901, U.S. Steel is now globally ranked at #27 and is $800 million in debt.
Hamstrung by more strict environmental regulations than in China which drives up production costs, as well as demands of labor unions, U.S. Steel has been looking for a lifeline to save the storied company.
Domestic rival Cleveland-Cliffs based in Ohio made an unsolicited offer to buy U.S. Steel for $7.3 billion last summer, which was promptly rebuffed at the Pennsylvania headquarters.
Instead of being bought by #22 Cleveland-Cliffs which would raise serious questions about monopolistic practices in our steel industry, U.S. Steel agreed to Nippon Steel's offer which was more than double. It is arguably more effective for the bottom line to merge with the world's #4 steel producer than a fellow traveler ranked in the 20s.
And while it's understandable that Biden, Trump and Kennedy, Jr. are doing all they can to win the Rust Belt states which are key to victory like in 2016 and 2020, there are plenty of other issues on which they could campaign that help rather than hinder national security.
Doing more to tackle the drug crisis which is leading to 100,000 overdose deaths a year nationwide, hitting once prosperous Rust Belt states particularly hard, is a good place to start.
Similarly, getting a hold of the borders, both with Mexico and Canada, though also from the high seas in places like Florida would be another helpful step by shoring up local wages and stemming the flow of illicit narcotics from drug cartels.
Though Biden, Trump and Kennedy, Jr. are all sounding the right notes on protecting U.S. industries, blocking the U.S. Steel deal won't bring back jobs due to how global trade works nowadays.
Since China joined the World Trade Organization in 2001, the U.S. lost over 3 million jobs in manufacturing. There's just no way American steelworkers can compete with mostly low wage workers in China and India. Tariffs as enacted in 2018 by then-President Trump are the best way to protect our industries, even if they do face international headwinds from regulatory agencies.
President Biden has always branded himself as a global statesman, finessed in dealing with foreign leaders. Yet opposing the deal already reached between iconic American and Japanese companies and thus damaging relations with close ally Japan undermines that narrative.
Bottom line, while it's understandable that Rust Belt states deserve more care and attention in modern presidential elections than say, California, New York, New Jersey and Illinois which combined already get the Democrats nearly half way to victory in the electoral college, winning over labor unions on steel shouldn't drag the whole country down.
