The news that Nippon Steel wants to buy U.S. Steel is good news. If
money
talks, then this offer from a Japanese company speaks loudly. It’s a vote of confidence in American manufacturing, in American workers, and in the United States itself.
As we know, for decades, the American steel industry had been in decline as part of a generally dolorous trend toward de-industrialization. In 1950, the U.S. produced
half the world’s steel
; by 2021, that share had fallen to just
6%
. To be sure, that falling percentage wasn’t all bad news—it’s good news if other countries, too, are producing a vital commodity that improves well-being.
Yet, at the same time, the strategic as well as economic benefits of a strong domestic steel industry are obvious. With wars raging in Europe and the Middle East — and other threats on the horizon — we are reminded that heavy metal matters. And that means steel-making capacity on a country’s own turf is a vital national security priority.
After too long a period of neglect, policies finally have been put in place to strengthen American steelmaking. “Made in USA” was always a popular vote-winning slogan, and yet it took time for Washington, D.C., officialdom to get the message. Now, politicians and policymakers get it. In fact, amid all the partisan rancor, there’s actually a robust bipartisan consensus that we must manufacture more at home. And American steel is the keystone of American manufacturing.
So it’s fitting that this offer from Japan comes to U.S. Steel in the Keystone State, Pennsylvania. Since its founding by Andrew Carnegie in 1901, U.S. Steel has made its home in Pittsburgh, and the would-be purchaser, Nippon Steel, has committed to keep the U.S. Steel headquarters there. Moreover, Nippon Steel has pledged to honor collective bargaining agreements with the United Steelworkers union. So that’s good news for workers across Pennsylvania and other states.
When someone wants to put $15 billion into your country, that’s a sincere form of flattery. In fact, this Nippon investment is part of a larger picture, which is that the U.S. is still a great place to invest. Total foreign direct investment into the U.S. is estimated to be $4.5 trillion. So, its warts notwithstanding, America has plenty of mojo.
Still, critics say that there’s something wrong with an iconic American company being owned by a foreign company. To which one can say there’s a difference between a foreign company in a friendly country and a foreign company in a, perhaps, unfriendly country.
According to the American Enterprise Institute (AEI), in the years 2005 to 2023, China invested
$190 billion
in the U.S. It’s fair to say that every dollar of those investments is now being scrutinized in light of strained relations between the two countries. Indeed, according to AEI, that Chinese investment total has barely budged since 2018.
That’s why it’s heartening that U.S. Steel’s suitor is Japanese. Japan has been a close friend and ally for decades; indeed, it’s a member of the Quadrilateral Security Dialogue, known as the Quad — the other members being the U.S., India, and Australia. The Quad is the centerpiece of the emerging Indo-Pacific alliance that aims to bolster democracies and contain non-democracies such as China, North Korea, Russia, and Iran. Interestingly enough, the idea for the Quad came from the late Japanese prime minister,
Abe Shinzo
.
The full details of the U.S. Steel deal have yet to be finalized. And yet, sorting out details with a reliable friend is a lot easier than sorting them out with a possible foe.
In the meantime, the Nippon offer is unabashedly good news for one group: investors. As recently as August, U.S. Steel stock was selling at $22. But then the markets concluded that the company was undervalued, and a bidding war ensued. It’s this bidding war that Nippon seeks to win with its offer of $55 a share—more than double the price of just four months ago. So that’s $15 billion for shareholders, from individuals to pension funds.
Would that every company in America see its value more than double. Would that all of America get such an affirmation that this is a great country in which to work, to produce — and yes, to make money.
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James P. Pinkerton is a longtime columnist, author, and political analyst. He worked in the White House policy offices of Presidents Ronald Reagan and George H.W. Bush and in the 1980, 1984, 1988, and 1992 presidential campaigns.
