Biden gave a major union what they wanted — and it could blow up in their face: analyst
President Joe Biden made good on something the United Steelworkers union wanted him to do, and blocked a $15 billion acquisition of U.S. Steel by the Japanese-based Nippon Steel — but this is not good news for the union, wrote columnist Catherine Rampell for The Washington Post. Indeed, by giving the union what it wanted, Biden may have crippled the U.S. steel industry, and with it, thousands of union jobs he was so keen to protect.
"The Japanese are understandably insulted by Biden’s decision," wrote Rampell. "But Japan isn’t the only friend Biden betrayed. He also shafted the American union workers he claims to champion. In a way, the episode illustrates a broader problem within the Democratic Party: mistaking pandering and appeasement for loyalty."
U.S. Steel has struggled to keep up with foreign competitors for decades, Rampell noted — and rather than try to compete and innovate, it repeatedly went to the government for protectionist bailouts, which a whole line of presidents gave to them, only for the business to stagnate further.
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"U.S. Steel’s mills tend to be older and more expensive to operate than even those of its American-owned competitors," wrote Rampell. "The company put itself up for sale in 2023, hoping a white knight would rescue it. The best offer came from Nippon Steel, which pledged to invest $2.7 billion to modernize outdated blast furnaces at older mills in Pennsylvania and Indiana. Nippon also promised not to reduce production capacity and to honor the existing union contract. For both shareholders and workers, this offer looked like a godsend. Without it, U.S. Steel would be forced to close those older mills, the company’s CEO said last fall, causing Americans to lose jobs."
And yet Biden intervened to shut the deal down, citing "national security" concerns — even though Japan is a close U.S. ally. In truth, he was doing this to please the United Steelworkers leaders, who "were apparently peeved that Nippon had not sought the union’s blessing before making a takeover bid, as other prospective buyers had" — even though Nippon's offer was considerably more generous, and that firm had pledged to invest massive amounts of money revitalizing U.S. factory towns and to protect union jobs. Not only are thousands of U.S. Steel jobs now at risk, she noted, but Japan might retaliate by pressuring Nippon to close other steel mills in the U.S. it already owns, endangering even more American jobs.
Rampell added Biden didn't have to pull the trigger — he could have let Trump take the blame, as Trump also wanted to kill the deal.
The lesson here, she concluded, is that Democrats should not reflexively give their allies what they ask for, even if it's bad policy.
"Aiding and abetting an ally’s self-sabotage does not make you a loyal pal. It simply makes you a craven appeaser," she wrote. "[Democrats] do themselves, and their constituents, no favors by coddling coalition members intent on doing something dumb. One need only look across the political aisle to see what happens when a party sacrifices its principles in service of total appeasement."