Highlights
On Friday, President Joe Biden officially blocked Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, citing national security concerns. This decision followed a year-long review by the Committee on Foreign Investment in the United States (CFIUS), which is tasked with evaluating potential national security risks from foreign acquisitions of U.S. assets. CFIUS serves as an interagency committee headed by the president. In the case of the U.S. Steel acquisition, the committee failed to reach consensus, leaving President Biden as sole arbiter of the deal’s national security risks. Ignoring the advice of his principal national security advisers, President Biden asserted that the acquisition posed national security risks and scuttled the deal.
Pro-Worker vs Pro-Labor
The Biden administration has made no secret of subordinating the interests of taxpayers to organized labor. Time and again, the administration has favored this constituency over the national interest. The administration often couches this approach as “pro-worker.” But given that only about 1 out every 17 private sector workers is in a union, this rhetoric is indefensible. Over the last 40 years, private sector unionization has fallen by approximately 10 percentage points in the private sector while government unionization has remained roughly the same.
In blocking the Nippon acquisition however, Biden chose to side with union leadership over the rank-and-file union members. While the United Steelworkers (USW) national leadership opposed the deal, the union workers directly affected by the deal were enthusiastic about Nippon Steel’s promises. For instance, workers at U.S. Steel’s Irvin Works plant in Western Pennsylvania overwhelmingly supported the acquisition—a reported 95 percent of them favored the deal.
Why? Because Nippon Steel wasn’t just planning a buyout; it committed to investing $1 billion to upgrade the plant’s aging infrastructure. Nippon Steel’s total investment plan extended beyond Irvin Works. It included a proposed $300 million investment in U.S. Steel’s Gary Works facility in Indiana and additional modernization efforts across other facilities, bringing the total planned investment to more than estimated $2.7 billion. These commitments represented more than a financial transaction – they were precisely the sort of real investment in manufacturing that populists seem to champion.
Oren Cass and the Contradictions of Populism
Oren Cass, a populist commentator, has argued in favor of expanding unionization, but has critiqued union leadership for embracing progressive politics at odds with the views of membership. One would think the Nippon Steel acquisition, which was supported by the rank and file but not progressive leadership, would be exactly the sort of investment he’d like to see. Alas, Cass sided with union leadership and publicly opposed the acquisition.
This contradiction exposes, yet again, a fatal flaw with populism: it is never firmly grounded to a fixed set of facts or principles. Indeed, Cass’s own work is often distorted to fit a narrative, otherwise unsupported by data.
Cass’s stance against the Nippon Steel deal is a glaring contradiction to his supposed “pro-worker” ethos. By opposing the acquisition, Cass aligned himself with union leadership’s moribund outlook that poses risks to the entire region.
Cass has at times argued that manufacturing productivity in the United States has been on a troubling decline—a key issue for the sector’s competitiveness and worker prosperity. At other times Cass has argued that manufacturing benefits from “technological advances that complement labor and increase output.” For that to occur, workers need more investment capital to be more productive. That is exactly what Nippon had pledged to do.
Nippon Steel’s proposal directly addressed this challenge by offering a path to increased productivity through upgraded facilities and capital improvements. Rejecting the deal ignored this critical aspect, leaving workers and the industry further behind in the global race for manufacturing productivity.
This is where the debate takes a negative turn. Blocking the deal didn’t just thwart a potential boon for American steelworkers; it also perpetuated a pattern of politics that treats union leadership’s objections as synonymous with workers’ interests. They’re not. Nippon’s proposal offered more than just a financial transaction; it was a blueprint for revitalizing U.S. Steel’s operations and making its workforce more productive. By standing against the deal, both Biden and Cass reinforced a troubling dynamic: policy that is subordinated to politics, instead of the genuine interests of U.S. workers.