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Commentary: Now it’s Trump’s turn to save steelworker jobs

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Commentary: Now it’s Trump’s turn to save steelworker jobs

President Joe Biden gave the steelworkers union a victory by blocking the purchase of US Steel (USSX34.SA) by Japan’s Nippon Steel (NPSCY) on Jan. 3. But that won’t necessarily protect vulnerable steelworker jobs, which is a hot political issue whether an election is underway or it’s the off-season.

Biden is essentially punting the issue to incoming President Donald Trump, who’s likely to use import tariffs to protect domestic steelmakers and their workers. That may not accomplish much either, however. During Trump’s first term, tariffs may have supported a small number of American jobs in favored industries, but they raised costs and killed jobs in other industries, for a net effect that was slightly worse than doing nothing.

Trump now has a chance to improve on his first-term performance. After Biden blocked the Nippon-US Steel mashup through an executive order, the two firms sued to overturn Biden’s order and allow the buyout to move forward. In two separate lawsuits, the firms challenged the legal basis for Biden’s order and accused the United Steelworkers union of colluding with a third company, Cleveland-Cliffs (CLF), to prevent the Nippon purchase so Cliffs could buy US Steel at a lower price and establish a monopoly in some corners of the domestic steel market. Analysts think the lawsuits have slim odds of success.

The saga began in 2023 when Cleveland-Cliffs tried to buy competitor US Steel for $7.3 billion. US Steel rejected the offer as too low and started looking for an alternate buyer — or another type of deal to help it build scale and garner fresh investment in more modern technology. In December 2023, US Steel and Nippon announced a deal in which the Japanese giant would buy the American icon for $14.9 billion, a 45% improvement on the prior offer.

There was one catch: The deal would need US government approval since a foreign firm cannot buy an American company if it might create national security risks. Last year, Joe Biden, Donald Trump, and Kamala Harris all came out against the deal, basically saying US Steel should remain in American hands because — well, just because. The real reason was union opposition to the deal and worries about losing union votes in bellwether Pennsylvania during the 2024 presidential election.

Most business analysts see no national security risk in the purchase since Japan is a close US ally and the US defense sector only needs around 2% of domestically produced steel. The government body whose job is to assess whether there’s a security risk deadlocked on the question, leaving the decision up to Biden. After he said no, critics slammed the lame-duck president for scotching a sound business decision that would have done more to secure steelworker jobs than leaving US Steel behind the competition on scale and efficiency.

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