Americans like to choose. Just visit a supermarket and feast your eyes on the variety of brands of cereal, toothpaste, or potato chips on display. Variety is the spice of life in a free-market economy.
That is less true in the political realm, where our two-party system seems to serve up the same stale ideas year after year. Politics seems to be about limiting choices rather than empowering voters. Recall the words of Socialist Bernie Sanders when he was running for president (the first time). “You don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers,” he told CNBC in 2015.
Perhaps this lack of choice explains why “the share of voters who say they have high interest in the 2024 election has hit a nearly 20-year low at this point in a presidential race, according to the latest national NBC News poll, with majorities holding negative views of both President Joe Biden and former President Donald Trump.” It’s Trump’s third straight presidential bid, and Biden has been in Washington since 1973. They are stale.
The candidates themselves aren’t helping their cause. Their ideas often overlap, limiting the choices available to Americans. For example, both oppose allowing Nippon Steel, a Japanese company, to buy U.S. Steel.
“U.S. Steel has been an iconic American company for more than a century. And it should remain a totally American company,” President Biden said last week. “American owned, American operated, by American union steelworkers — the best in the world. And it’s — that’s going to happen. I promise you.”
It isn’t clear how he would achieve this outcome. This is a case where a private company is trying to acquire another private company. Presidential approval shouldn’t be necessary.
With that said, Biden’s predecessor and would-be successor agrees with the president’s general approach. “I would block it instantaneously. Absolutely,” Donald Trump said in January about the proposed Nippon purchase of U.S. Steel. “We saved the steel industry. Now, U.S. Steel is being bought by Japan. So terrible.”
By “saved,” Trump means he imposed tariffs on imported steel. Biden is keeping most of the tariffs in place. On steel policy, voters have an echo, not a choice. No wonder they are less-than-interested.
Tariffs are a form of tax, paid by people. The American Action Forum writes that, “based on 2022 import levels, these tariffs currently impact over $350 billion of imports and exports and increase consumer costs by roughly $51 billion annually.” That’s a lot to pay to “save” an industry. Especially since the market is available to “save” the steel industry, if policymakers will allow it to work.
Nippon Steel, a Japanese company, is the world’s fourth largest steel maker. In the last year has lifted its net profit forecast twice. Reuters notes it has done so, “to reflect stronger-than-expected results in the first half, helped by improved margins and higher gains from group companies.”
Still, it plans to keep expanding. Nippon VP Takahiro Mori told Reuters that the company “plans to further pursue initiatives such as product differentiation, ensuring stable production and global expansion to counter poor market condition.”
One key move is the bid to purchase U.S. Steel, a move that would make both companies stronger and better. This would potentially “save” the industry in the U.S. without any government involvement whatsoever. “The two steelmakers said the U.S. firm’s headquarters will stay in Pittsburgh, its name will be unchanged, and production and jobs will remain in the United States even after the $14.1 billion deal,” Japan’s Kyodo News reports.
In spite of the potential political interference, Nippon is eager to move ahead. And U.S. Steel’s shareholders also want the deal. It still needs to be approved by the Committee on Foreign Investment in the United States. However, there is no reason, in a free-market economy like ours, for government leaders to block this deal.
Both President Biden and former and would be President Trump want to come down on the side of American workers. That means they should stand down and allow Nippon to close this deal at a fair price, one that’s set by the market. Choice is important. Voters and companies alike should be able to make their own economic decisions.
