America's New Steel Curtain
The best that can be said about President Trump's blessing of Nippon Steel's purchase of U.S. Steel is that it blocks Cleveland-Cliffs' political power play to buy U.S. Steel instead. The worst to be said is that the purchase has become another opening to make U.S. companies less competitive with higher tariff walls on foreign steel.
Mr. Trump on Friday held a rally in Pennsylvania to take credit for the Nippon Steel takeover he is finally approving. He announced a consolation prize to United Steelworkers boss David McCall, who had opposed the deal: Doubling steel tariffs to 50%.
The President boasted about Nippon Steel's commitment to invest $14 billion in U.S. Steel, including $2.2 billion in Pittsburgh's Mon Valley plant. But the Japanese company had agreed to most of its commitments when it sought approval from the Biden Administration. President Biden still blocked the deal as a favor to Mr. McCall and Cleveland-Cliffs CEO Lourenco Goncalves.
They want to create a steel cartel with more leverage to raise prices. Nippon Steel had outbid Cleveland-Cliffs in 2023. Acquiring U.S. Steel would have given Cleveland-Cliffs control over 100% of U.S. blast furnace production, iron ore reserves, electrical steel production, and two-thirds of automotive steel production.
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