Donald Trump and Kamala Harris have both said that if elected president, they will block Nippon Steel’s planned, $14.9 billion acquisition of U.S. Steel. They’re not being leaders.
Forget for a second how odd it is that would-be presidents apparently have the power to run roughshod over the desires and private property rights of U.S. Steel shareholders, and forget how odd it is that a Republican plans to substitute his viewpoint for that of the marketplace. Then stop and think about why Trump and Harris are doing what they’re doing.
What they’re doing is all about polls. And politics. Nothing more than that. Rather than do the right thing, they’re letting polling and politics lead them. Put another way, they’d rather be president than be good presidents.
What’s sad about the stances being taken by Trump and Harris is that deep down they have to know they’re wrong. To see why, contemplate the reaction of both nominees if the prospective buyer of U.S. Steel were located in Tennessee, as opposed to Tokyo.
If so, the deal would have likely already been completed. And it would have been because rare is the business that refuses a capital infusion. Capital is incredibly difficult to attain, without it businesses lack the means to evolve by investing in their future, which means the deal would go through if Nippon Steel were located in Nashville. Unknown is why a buyer in Japan should be treated differently from one in Tennessee.
To which some will say it’s a “national security” issue, that “the Japanese” could deprive U.S. producers of steel during a time of war. Except that such an assertion is utter nonsense. The simple truth is that the U.S. could be totally bereft of steel, at war with and embargoed by every steel-producing nation in the world, but American producers would still be utilizing the world’s steel as though it had all been sourced in Pittsburgh, PA. That is so because there’s no accounting for the final destination of any good. Short of steel producers ceasing to sell their product altogether, the world’s steel will always make it to the United States.
Considering national security in a broader sense, foreign ownership of American wealth is the ultimate security blanket. Think about it. Who wants to aim guns and bombs at their wealth?
Wealth is italicized up above simply because that’s the other obvious point about Nippon Steel’s proposed acquisition. As evidenced by the $14.9 billion price, U.S. Steel is plainly a fraction of what it could be. That’s the why behind Nippon Steel putting up capital, and absent Nippon’s capital, how else is Pittsburgh, PA-based U.S. Steel supposed to improve its present and future if it can’t take in precious investment, along with the precious know-how of buyers eager to vastly improve what they’re investing in? Tick tock, tick tock…
As a businessman Trump has to know how crucial capital infusions are. As for Harris, she comes from a state that, if it were a country, would be the world’s 4th richest country. She has to have donors who’ve explained the obvious to her.
Sure, but the polls tell Trump and Harris to block an acquisition that they deep down know to be right. Which means they want to be president more than they want to do what’s right.
The problem for them is that true leaders lead those they court to improved thought, as opposed to telling them what they want to hear. Regarding Nippon Steel’s acquisition of U.S. Steel, Trump or Harris can promise to block it, or be a leader. The eventual president can’t be both.
Republished from RealClear Markets
