08.04.2024 Author: Phil Butler

What’s Behind the Hoopla Over Nippon Steel Acquiring U.S. Steel?

What’s Behind the Hoopla Over Nippon Steel Acquiring U.S. Steel?

U.S. President Joe Biden seems to be using a foreign acquisition of an American company as a rallying point for his upcoming re-election bid. Biden says Nippon Steel’s acquiring U.S. Steel will be a threat to national security, and the loss of a “national treasure.” The question is, “Is this Japanese buyout really the central issue?” By the time you’re done reading this report, you’ll understand why it is not.

First, let’s examine what’s happened on the surface of this U.S. Steel issue. In a statement published on the White House website, President Biden was quoted saying:

“U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

Potomac Two Step

From the news next, we are led to understand that “insiders” suspect Biden will eventually try to use the Committee on Foreign Investment in the United States (CFIUS), a powerful panel that reviews foreign investments in U.S. companies, to recommend the deal be blocked on national security grounds. Naturally, leaked information suggests that CFIUS is in favor of letting the deal go through. And you can lay odds, said deal will go through. Japan has to have U.S. Steel, and the United States has to let the Japanese expand its industrial base. I’ll explain why, later.

As you might expect, Biden’s chief opponent in the upcoming elections, former President Donald Trump, has also said he will block the $15 billion buyout if he is elected. Of course, both candidates have a need to appear supportive of the interests of American workers, and particularly organized labor. Meanwhile, the political football match going on for votes, is actually being orchestrated from the sky box where American and world elites run the whole show. The fact that Japan’s PM is on his way to Washington on April 10th will certainly add some color and twists for Wall Street fans and steelworkers interested in these events. But the real game has already been decided at the backroom betting tables. Now, let’s move on to the bigger picture, the only picture that counts.

Imperial Japan Redux? Uh, no!

Japan, and island nation not unlike the UK, is over. That is, unless they can manage to generate business and earnings from abroad. The situation for the Japanese is not unlike the one they faced before World War 2. You see, Japan has no natural resources to speak of. Like the UK, these islands are basically tourist attractions with a lot more people to employ and take care of than before the Pearl Harbor attack. Let’s dwell on this for the moment. What can the U.S. offer Japan that can possibly be exchanged for more U.S. investment potential? Nothing. Some of you may be thinking “weapons” and protection, but you’d be wrong. The Japanese only recently rescinded laws prohibiting them from exporting weapons. The Japanese have entered the worldwide arms race. As for the protection, U.S. companies in the defense sector are expanding profits providing that for the Japanese. Before I discuss ballistic missile interception, let me delve for a moment into the crucial balance America faces in the new multipolar world.

The Japanese have been discussing concerns about the Quadrilateral Security Dialogue (QSD) as part of the Free and Open Indo-Pacific plan. Given the recent movement and expansion of the BRICS nations and the growing connectedness between Russia, India, and China, the Japanese will obviously have huge decisions to make very soon. This is an especially acute situation, given we are in a new Cold War. This strategic security dialogue between Australia, India, Japan and the United States is about to be ramped up several notches. However, this is but once facet of upcoming policy moves intended to maintain the Western political, economic, and military hegemony. Here’s where things get interesting.

The United States and the Western alliance are desperate to keep a foothold in Asia. And the Japanese are in a mid to long-term battle for survival economically and strategically. The pivot point is the historical dynamic of a BRICS-led world, versus the status quo. In short, Japan’s leadership is going to have to choose sides, and soon. If Nippon and other Japanese companies cannot invest in the U.S. and Europe, the expanding BRICS alliance will be the only alternative. For the U.S., Japan’s asking to join the BRICS will be a geopolitical catastrophe.

I had originally intended to mention a company I used to work for, Nucor Steel, the U.S. largest steel manufacturer. Nucor, you see, lost the bid for U.S. Steel to Nippon. This situation bears a separate scrutiny where organized labor, Biden or Trump, and Nucor’s non-union system are concerned. Biden’s and Trump’s alleged ties to organized crime and unions bears mentioning, too, but only as a bit of irony. Given that the BRICS nations will soon own nearly all of the natural resources on Earth (comparatively), my assertions for a Japanese economic catastrophe take more solid form. Now let’s look at what the U.S. will get for allowing Nippon to buy U.S. Steel. I mean, besides a final toehold on world hegemony.

The Military Industrial Complex’s Role

Few people read about what the U.S. Congress does. So, the lawmakers recently approving the Aegis Ashore systems for deployment in Japan went unnoticed. When the Japanese nixed the deal, opting for creating seaborne Aegis alternatives, some Wall Street tycoons lost their lunch over the lost billion. The onshore systems built by Lockheed are slated to feature the Standard Missile-3 Block IIA missile interceptor, which is currently completing testing. And I’ve no doubt this land-based system will be discussed when Prime Minister Fumio Kishida visits. The missile itself is being developed by Raytheon, so Nippon-US Steel seems like a nice trade for the industries that control American politics. In addition, Japan recently purchased 400 Tomahawk land attack missiles. Last month, Japan and the United States started new talks to boost military cooperation as they see a perceived threat from China. Japan’s Defense Ministry securing funding to build two new Aegis destroyers, and a score of smaller defense contracts, will boost the American military-industrial complex’s Wall Street numbers.

Nippon will be allowed to buy U.S. Steel, or some dramatic alternative will be set in motion. Joe Biden and Donald Trump are simply posturing. It’s what they must do to ensure their benefactors’ success. And, in the case of the American voters, it’s important that the mice feel convinced they have succeeded in some small way. Sadly, and ironically, no matter how this deal and others shape up, there is only one way for Japan to survive as a key member of the new multipolar order. And becoming a bigger tourist attraction is not the answer. Aligning with the BRICS and burying the hatched with China and Russia is.


Phil Butler, is a policy investigator and analyst, a political scientist and expert on Eastern Europe, he’s an author of the recent bestseller “Putin’s Praetorians” and other books. He writes exclusively for the online magazine “New Eastern Outlook”.

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