Donald Trump is loud stated, which will block Japan’s Nippon Steel’s attempt to acquire the U.S. Steel for $14.9 billion. For him, this is not just a deal – it is a battle for American industrial pride and security. Once the U.S. Steel was a symbol of US industrial power, and now its sale to a foreign company by the newly elected US president is seen as an affront to national pride. According to Trump, the enterprise should remain under American control. He promises to revive the company through tariffs and tax breaks, urging buyers to be “beware”. Trump is putting the principles of protectionism on the line to protect American industry. But is America willing to pay the price in the form of rising prices and economic pressures? It is significant that in the struggle for U.S. Steel is deciding the fate of not just one company, but of American industrial pride.
Background of the question
United States Steel Corporation (U.S. Steel) is one of the largest steel companies in the United States, founded in 1901 by J. P. Morgan through the merger of several companies. The company manufactures and sells steel for the automotive, construction, consumer, electrical and energy industries.
Nippon Steel Corporation – the largest steel producer in Japan and one of the leading in the world, with headquarters in Tokyo. The company is engaged in steel production, engineering, chemical products and system solutions.
So, the U.S. Steel for Americans is not just one of many regional companies. It is national pride and a symbol of the power of a superpower. However, recently the company U.S. Steel has been going through a tough time: due to increasing competition from cheap Chinese steel this year income of the American giant decreased by 1/8, to $12.1 billion, and net profit decreased by half, to $473 million.
In this context, the proposal buy the US steel “icon” for $14.9 billion, announced a year ago by Japan’s Nippon Steel, may have seemed like a solid business deal to some, but not to the leaders of the superpower, who are concerned about issues of national security and jobs. President Biden’s administration and President-elect Trump have expressed their intention to block the deal. Now the future of the deal remains uncertain as regulatory reviews and discussions at the highest political level continue.
Why Trump is adamant that US Steel should remain American
The deal between the Japanese and American steel giants has been controversial for a number of reasons. The US president-elect believes that the sale of a strategically important steel plant could weaken national security, as steel is a key resource for defense and infrastructure, and its control by a foreign company poses potential risks to the country. The sale of an American company to a foreign corporation causes the representatives of the American establishment to fear losing control over strategic decisions.
Another problem is the fear of American leaders about the loss of jobs. Although Nippon Steel promises to save jobs and invest in production, unions and politicians are skeptical of these claims. They suggest that in the long term, the company may cut staff or move production to countries with cheap labor.
Investors’ promises and promises do not inspire confidence. Although Nippon Steel says it intends to develop American industry, critics believe that the interests of workers may be forgotten after the deal, increasing tensions.
Trump’s statement illustrates his protectionist policy. He seeks to protect the interests of workers and national industry. This decision is supported by trade unions and part of the workers, who see it as a guarantee of their employment. Critics of the deal point out that the sale of such a strategic company as US Steel could threaten the infrastructure of the United States, weaken supply chains and make the US dependent on foreigners.
Trump’s intervention creates economic uncertainty. The situation may increase protectionism in the US. If the deal is blocked, it will set an unpleasant precedent: foreign investors may fear that access to American companies will be limited. In this case, it will protect the domestic market, but will reduce the attractiveness of the USA as an investment El Dorado.
Blocking the deal could also strain relations with Japan, an important US economic partner. This “snowball” could lead to new trade barriers and even a global trade war.
Controversies surrounding the deal have already caused a political divide. Although representatives of Republicans and Democrats are united in the importance of protecting the national industry, they profess different approaches, which creates new points of tension. The irony is that both Democrat Joe Biden and his vice president, Kamala Harris, are also skeptical of the deal. Harris said during the election campaign that US Steel should remain in American hands. But that hasn’t stopped the Biden administration from continuing to review the deal, delaying a decision until after the election.
The agreement caused discord not only among politicians, but also in society. Trade unions, which traditionally support Democrats, suddenly agree with Trump: “US Steel must remain American.” At the same time, the Nippon Steel company assures that its intentions are transparent – investments, new technologies, jobs. But critics believe that these are just words.
The situation creates ambiguity for both parties involved in the agreement. Nippon Steel may lose the opportunity to expand, and US Steel – investment in modernization and development.
So the controversy surrounding the deal between Nippon Steel and US Steel is not just about economics. This is a struggle for balance between national security, job protection and openness to foreign investment. Regardless of the decision, it will have consequences for US politics, economics and international relations.
This case illustrates how politics intersects with economics and national prestige. Donald Trump declares: “US Steel, the symbol of American industrialization, will not become the prey of a foreign corporation.” His message underscores his determination to stop the deal, which he believes threatens American industry, jobs and national security.
This story is not only about steel
In this conflict, not only the fate of a single large-scale agreement is decided, but also the question: should America remain open to foreign investment, or should it focus on protecting its own interests? Trump chose the latter path, supporting domestic industry even if it could hurt global trade. Time will tell whether it will be a success or a mistake. But his position is already dividing society and creating new challenges for the US economy. Trump is putting the principles of protectionism on the line to protect American industry. But is America willing to pay the price in the form of rising prices and economic pressures? In the fight for US Steel, the fate of not only one company is decided, but also of American industrial pride.
It is known that Trump does not stop only at this agreement. He plans to introduce new tariffs: 25% on Canadian and Mexican imports and 10% on “made in China”. He is confident that it will help American businesses, but economists warn: prices for consumers may rise. The average American may pay hundreds or thousands of dollars more for goods, which could further exacerbate inflation. Trump’s protectionist measures, primarily import tariffs, may hit average Americans the hardest. Economists warn that the measures could raise commodity prices as companies pass the cost on to consumers. This will create additional financial pressure on households and contribute to the growth of inflation.
Tetyana Viktorova
