On Why the USW, Biden and Trump are Right about the Nippon/USSteel Ripoff

By Ike Gittlen

https://ikegittlen.substack.com/

For months the proposed sale of USSteel to Nippon Steel has been front page news. The Committee on Foreign Investments in the United States (CFIUS), that reviews the national security implications of these global transactions is reportedly at an impasse and unable to come to a determination.

The reality is that what CFIUS decides (or doesn’t) is irrelevant. Both the incumbent President and the President-elect have said they will not approve the deal. It’s slowly dawning on people that this deal isn’t likely to happen.

We shouldn’t be surprised. Opposing the Nippon/USSteel deal is the logical response to all that we have learned about the steel industry, the “free trade” model of global trade, the importance of maintaining domestic control over critical supply chains and how the big money vultures strip-mine our stable industrial/manufacturing enterprises. It isn’t, as Nippon/USSteel would like us to believe, something that must happen or USSteel will collapse. Once this bad deal is gone, we know there are a number of options to retain and enhance USSteel’s assets.

To understand what’s happening we have to start with the global steel overcapacity. The OECD reports a global steel overcapacity exceeding 500 million metric tons, with some estimates reaching as high as 630 million metric tons. This has nations with overcapacity (China in the lead) looking for places to dump their steel production. Our nation is a lucrative place to offload unneeded steel. Interestingly, Nippon is reportedly looking to do deals in other nations with lucrative steel consumption, as the USSteel deal falters.

It’s fantasy to believe that once Nippon owns USSteel it won’t use it to move its overcapacity here. Simply look at the cases that the USW and the Steel Industry have won at the International Trade Commission, to get a flavor of how blatant other nations have violated our trade laws to gain access our steel market. The failure of Nippon to offer credible and enforceable commitments to continue American domestic production, should convince us of their real intent. This is the heart of the national security concern. That if Nippon is allowed to own such a large part of American steel capacity, the will result will be steel shutdowns here and less ability to supply our own needs of this critical economic sector.