” States have no friends – only interests”, or so goes the copied version of Lord Palmerston’s speech. That was so cynical – so 19th Century British Empire. But 170 years later, try buying another nation ‘s , steel , company and you might think Lord Palmerston was right.  ,
Japan’s largest steel company,  , Nippon Steel, wants to acquire , US Steel. It was a veritable example of American industrial might and technological prowess many decades ago. Less so these days.
United States President , Joe Biden , pronounced himself opposed to the deal. That was only two months after his love-fest with Japanese Prime Minister , Fumio Kishida touting the strength of the , Japan-US alliance: rock solid and based on shared mutual values.
The decision to approve or reject the agreement has been postponed until after the November election.
Both Senator JD Vance, the Republicans ‘ vice presidential candidate, and former president Donald Trump are against the deal.
If foreigners obtain US Steel, one might get the impression that the end of the republic is near.  ,
The main reason given is national security.
Is there a problem with national security?
It is prudent for a nation to closely monitor its main industries and the owners of them. But maybe the biggest issue with the , US Steel , deal is that it’s embarrassing.  ,
For one thing, people are nothing if not tribal. And who does n’t want the home team to succeed, on its own?  ,
This case serves as an embarrassing reminder that America’s business and political elites have abandoned the nation’s manufacturing dominance over the past five decades by moving much of it overseas.
However, a little embarrassment can sometimes be helpful if it helps you grow.
And this is a deal where it pays to swallow one’s pride.
Not unusual, to say the least.
For one thing, the Japanese are our friends. And Nippon Steel’s proposal is not unprecedented.
Mitsubishi UFJ Financial Group , ( MUFG ) wrote a$ 9 billion USD check to save , Morgan Stanley, the American financial icon and a key player in global capital markets. That was in 2008 when it was within hours of collapse.  ,
Morgan Stanley’s life had a fresh start. The Japanese got a good investment while becoming the bank’s largest shareholder. And it has worked out well for both sides. Nowadays nobody even knows Morgan Stanley is Japanese-owned.
The Japanese, in effect, did this as a favor to the Americans. They stepped in to profit instead of letting the Wall Street company collapse due to the irresponsibility of its own making. They did n’t.
Does allowing foreigners to own a US company, however, put us in danger?  ,
That depends on which foreigners and the particular agreement.  ,
In this case, Japan is a longtime ally – and an excellent partner. Also, the deal benefits both nations.
A deal that leads to employment in the US
Japan’s existence as an independent country depends on the United States and the , US military.  ,
Tokyo is well aware of that.  ,
A weak America poses a threat to Japan.
Investing in US , Steel , and modernizing it will create great-paying jobs in the US. Importantly, it will give Japan a strategic asset that the United States has neglected and provides insurance for its survival.  ,
Opponents have n’t produced a believable scenario in which Nippon Steel would ( or could ) shut down US steel production. Or in which it could create any political brouhaha that would endanger the essential , US-Japan relationship , and defense coverage.
As importantly, Japanese investment has been good for the nation.  ,
jobs in Japan come from manufacturing
Toyota,  , Nissan and , Honda , are just the most well-known Japanese companies in America. Moreover, they support over 450, 000 , manufacturing , jobs in the United States.  ,
In addition to its significant research and development operations, Japan is the top overall foreign investor in the US.
The litmus test: Americans want to work for Japanese companies. And union organizers struggle to persuade them that they are unhappy.
Does anyone recall the 1980s, when Japan and its businesses were vilified on Capitol Hill and other locations? We were all going to turn into slaves as Japan seized control of our nation and economy.  ,
Hardly.
However, it seems as though what is being said now will happen to American workers if Nippon Steel buys US Steel. Lose jobs, pensions, everything.  ,
Actual US Steel employees support Nippon Steel’s efforts to modernize and strengthen its workforce, which is less well known.
China Ties?
Listen to deal opponents and one would think Nippon Steel were conspiring with the , People’s Republic of China , to destroy a US company.
Like many other companies, Nippon Steel has business dealings in the PRC.  ,
These should be carefully and precisely weighed against actual security risks. And not shaded to keep the United Steelworkers , union bosses happy.
If necessary, Nippon Steel should be required to modify or even end any China operations.  ,
And so should  , Boeing, General Electric, Ford, GM,  , Tesla, Honeywell and the hundreds of other American companies in the China market. They have done far more than Nippon Steel to build up the , Chinese economy , and the People’s Liberation Army over the last four decades.
Remember the Chinese , spy balloon , that flew over America in 2023? You might have noticed that the Biden administration refused to release a report on the findings. A likely reason is that the balloon’s innards had American components.  ,
Is racism a cause of the deal’s opposition?
Probably.
If a British company were attempting to purchase US Steel, one doubts that we would be in this discussion. Does anyone care that the Italians and the French own Chrysler, you ask?  , Also, there is an air of “yellow peril” in some of the , commentary.
However, the racism angle is a wash in this case. Take a look at the days when it appeared Renault would overtake Nissan. Company executives and Japanese government officials effectively took Nissan Chairman , Carlos Ghosn , hostage via charges of corporate misconduct. Furthermore, along with him, they arrested a senior executive,  , Greg Kelly, an American.
Avoid bringing up resentments between the US and Japan by remembering that they are friends. They need to stay focused on defending themselves.
Use Japan to rekindle US Steel’s greatness?
This would n’t be the first time.
In the 1970s and 1980s, American automakers were losing billions and producing subpar automobiles. Just look up “K-Car” on the internet. Detroit was in fact forced to get its act together by the Japanese.
Furthermore, Japan backed off and gave the American carmakers the breathing space to get their acts together.
Was that embarrassing? Sure. Infuriating? Sometimes. And there was occasionally excessive gloating from Japan.
But it worked out pretty well for everyone.
Damage Done?
Do n’t think Japan is n’t irked by Nippon Steel’s treatment. Japan has always felt uneasy about the commitment made by the United States.
Tokyo wo n’t be mollified by lines like” This is just business” or” This is just politics”.
Japan might start to wonder how trustworthy an ally the US is.  ,
And maybe the US administration decides it ca n’t defend Japan when the Chinese start to be brutal with it. Nothing personal, and we still love you. However, an election is about to take place or ( fill in the blank ).
If the Nippon Steel deal is rejected, the alliance wo n’t collapse. But it will leave a scar, instead of deepening and strengthening the US-Japan relationship.
The writer’s grandfather, Michal Hlohinecz, was a miner in one of the US Steel coal mines many years ago. What would he think of all of this? I have no idea. But he might have taken some offense at the idea that “foreigners” are the problem.
And the Japanese are not the cause of the Nippon Steel deal.
Former US diplomat and former US Marine officer Grant Newsham. He is the author of the book
Thank you for registering! This email had already created an account. Check your inbox for a link to authenticate yourself.