President-elect Donald Trump’s populist pledge will be immediately tested by the fight for the ownership of United States Steel Corp., forcing him to choose between domestic control of the industry and foreign investment that could benefit voters who helped send him back to the White House.
Trump will have to decide whether to advance President Joe Biden’s thwarting of a nearly $15 billion merger between the Japanese
But there is far less consensus among Republicans thanks to Nippon’s promise to refurbish aging coal plants and make other investments that could create US jobs. Members of the Pennsylvania congressional delegation were scheduled to meet with representatives of US Steel this week to “hear their side out,” said Rep. Brian Fitzpatrick (R-PA), signaling that the issue was far from settled.
Nippon has pledged $2.7 billion in investments, including $1 billion to upgrade the Mon Valley Works plant near Pittsburgh and $300 million to the Gary Works plant in Indiana. It also has promised no cuts at US mills for 10 years and even a $5,000 bonus for workers if the deal gets inked.
Yet the United Steelworkers union has continued to oppose the deal, saying that the loose terms could still allow Nippon to idle plants and send jobs overseas.
Some Republicans are still open to a third road—and say they believe Trump might be more malleable once he takes office. Trump often changes his mind after he’s committed to a position, most recently with his last-minute demand to tackle the debt limit in year-end budget talks, blowing up Republicans’ original plan.
“I don’t know what President Trump will do,” said Rep. Cliff Bentz (R-Ore.). “I was a little surprised when President Biden stepped in, because the question is does that actual merger preserve jobs or not?”
“The theory is that if you kept it American, there would be more jobs protected,” Bentz added. “That’s really the issue.”
Another Pennsylvania Republican, Rep. Dan Meuser, said he expected Trump is going to do a “close analysis and a close review of the deal, the potential deal, and make it better.”
Biden’s blocking of the merger hasn’t been warmly received in Republican circles, despite the party’s shift toward economic populism. Vice President-elect JD Vance was one of the first lawmakers to come out against the Nippon deal, urging the Committee on Foreign Investment in the United States to block it in 2023 along with Sens. Josh Hawley (R-Mo.) and Marco Rubio (R-Fla.).
The panel failed to reach a conclusion last month on whether the foreign investment posed a threat, leaving Biden to decide on his own. Some of Biden’s closest advisers, including National Security Advisor Jake Sullivan and Secretary of State Antony Blinken, privately urged Biden to try to reach a conditional agreement, though the president ultimately decided against it.
US Steel was once an economic titan, formed in 1901 through a merger of 10 smaller firms. The company’s reputation has been marked by cuts in recent years: it axed last year more than 1,000 workers in Granite City, Ill., and 1,500 in Michigan in 2019. Those actions came even after Trump’s steel tariffs. Biden embraced his predecessor’s protectionist trade tilt, levying tariffs on foreign metals, valuable minerals, and electric vehicle components.
“People in Western Pennsylvania know that US Steel isn’t the good guy,” Conor Lamb, a former Democratic congressman from the area, said. “They don’t even care if it’s an American company. They just want to know who’s going to invest.”
Lamb said the Biden administration has struggled to communicate the risks of the merger to rank-and-file steelworkers, leaving many with the impression that that the merger wasn’t a threat. That was bolstered by the steel companies’ extensive ad campaigns for the purchase, he said.
Many of those affected by the deal are the same voters who catapulted Trump to his historic comeback, fed up with rising prices and lured by the president-elect’s promises of bringing jobs back to the area.
The company last month projected weaker earnings for 2024 and warned it might close mills if the deal doesn’t go through.
The United Steelworkers, however, say the company is doing just fine, noting $1.2 billion in buybacks in the last two years.
Nippon’s promise not to close any US plants for 10 years still left room for the company to pause production, perhaps indefinitely, said Roy Houseman, Jr., legislative director for the United Steelworkers. Similar tactics have been used by US auto companies, which have delayed investments and “idled” some locations instead of shutting them down.
US Steel didn’t respond to requests for comment. A lobbyist representing the company declined to comment.
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