Joe Biden calls himself the most pro-union president in American history. But he’s punting a thorny union matter to his successor, Donald Trump, who may not have any better solutions than Biden does.
On Jan. 3, Biden, as expected, blocked Nippon Steel’s effort to purchase US Steel, the oxidized icon of American industrialization. US Steel has been seeking a buyer or other type of restructuring since 2023, and last year Japan’s largest steelmaker made a $14.9 billion bid for the firm. Shareholders support the deal, but the president has to sign off, given that steel production is important to the US defense industry and a foreign buyer could threaten domestic supplies.
Biden came out against the deal last March, saying US Steel should retain American ownership. Nippon tried to improve its offer by assuring the influential steelworkers union it would protect jobs and keep plants open. The union never bought it. Donald Trump, meanwhile, also came out against the deal last year.
As the 2024 election heated up, the odds of the Nippon purchase going through grew slimmer — at least until the election was over in early November. Trump, Biden, and Biden’s replacement Kamala Harris were all angling for steelworker votes in bellwether Pennsylvania, US Steel’s home state, and the safest bet for all was to simply oppose the Nippon purchase.
US Steel Corporation workers rally outside the company's headquarters in Pittsburgh, Pennsylvania, supporting the takeover by Japan's Nippon Steel, on September 4, 2024. United States Steel warned Wednesday it could shut its Pittsburgh headquarters and shutter long-running factories in Pennsylvania if the politically sensitive takeover by Nippon is blocked. (Photo by Rebecca DROKE / AFP) (Photo by REBECCA DROKE/AFP via Getty Images) ·REBECCA DROKE via Getty Images
Trump’s victory in November suggested no deal would go through once he became president, since the foreign purchase of a landmark steel producer would violate Trump’s “America First” doctrine. But there was still a chance Nippon could sweeten its offer and Biden might bless the deal during the lame-duck period before Trump took office.
That would have made business sense — and perhaps been the best outcome for US Steel’s 10,000 unionized workers. Many business analysts think the Nippon offer was the best US Steel could hope for. US Steel is a pipsqueak compared to the global giant it once was. China now makes more than half of the world’s steel, followed by India, Japan, and the United States. Nippon Steel is the world’s fourth-biggest steelmaker, while US Steel is 24th. Since 2010, US Steel has lost money eight years out of 14. Its stock price is down 41% since 2010, while the S&P 500 index is up 433%.
US Steel started seeking a buyout or other strategic move in 2023 because it doesn’t have the scale to invest in the most modern technology and compete with the world’s biggest players, even excluding state-subsidized Chinese steelmakers. The company says it may have to close unionized plants, lay off workers, and move its headquarters from Pittsburgh to a non-union state if it remains a standalone operator. Some of the company’s union members even support the Nippon deal, an unusual breach between labor leaders and the workers they’re supposed to represent.
That could have given Biden cover for approving the deal, even if he had to take some heat from the union bosses on his way out the door. Instead, by killing the deal, Biden has left the steelmaker on shaky ground, with hundreds or thousands of jobs vulnerable. “President Biden claiming Japan's investment in an American steel company is a threat to national security is pathetic and craven,” Harvard economist Jason Furman, who was President Obama’s top economist, posted on X. “I'm sorry to see him betraying our allies while abusing the law.”
Biden isn’t offering a solution for how US Steel can become more competitive and safeguard worker jobs without the Nippon deal. The trend in the industry is toward more automated “minimills” that are cleaner and more efficient but require fewer workers. US Steel has suggested it will move in that direction if it can’t achieve broader scale.
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Last year, rival steelmaker Cleveland Cliffs made a lower offer for US Steel than Nippon, yet the union bosses favored that deal because they felt workers would fare better. Cleveland Cliffs has since made another purchase and appears to be out of the running for US Steel. But some analysts think it would be quick to snatch up valuable assets, at the right price, if US Steel started selling off parts of the business. That might only happen after US Steel closes plants and axes workers, however.
Trump says he has a solution: tariffs and tax incentives. Those would make foreign steel more expensive, aiding the domestic industry, while also perhaps providing subsidies for domestic production. The catch is that Trump-style protectionism tends to benefit one class of workers at the expense of others. Or, American consumers simply pay more to cover the higher cost of American labor. When Trump imposed tariffs on imported steel during his first term, for example, steel manufacturers benefited but purchasers of steel, such as automakers and appliance makers, had to pay more and pass along higher costs.
Steelworkers aren’t alone in their quest to maintain job security and living standards amid a rapidly changing economy. Unionized East Coast dockworkers could resume a strike on Jan. 15, sparking a big fight over automation, efficiency, and blue-collar jobs. Port operators want to modernize shipping with machinery that will speed processing and lower costs — and replace many workers. The union wants pay raises and job guarantees, regardless of efficiency. A strike could test Trump’s skills as a “pro-business” president who also wants to protect the blue-collar jobs that were prominent 50 years ago but are growing scarce now.
Trump’s whole “America first” philosophy, in fact, is a pledge to modulate technological progress and globalist efficiency by inserting some circuit breakers that protect jobs and living standards. So maybe Trump will be better than Biden, after all. For steelworkers, that means hoping the devil you don’t know is better than the one you do.
Rick Newman is a senior columnist for Yahoo Finance. Follow him on Bluesky and X: @rickjnewman.
