Half-Right, Plus

Today, President Trump celebrated the recently-announced “merger” (read: buyout) of the beleaguered U.S. Steel Corporation by Nippon Steel, its Japanese competitor. If we ignore the ignominious and prolonged, multi-decade failures of national policy, capitalist greed and market forces that strangled U.S. Steel, one could even be convinced that federal intervention and facilitated partnership with a stronger company is the right answer. And to be honest, it probably is.

First, let’s look at the last forty years. The United States has been gradually offshoring a significant quantity of our manufacturing, but we as a country still make a lot of things domestically, which is good. Manufacturing, construction and heavy industry employs a lot of people. More importantly, that manufacturing and building and construction are essential components of our national security apparatus- it doesn’t matter how smart our sensors are, or how diverse our ideology, or even how powerful our cutting-edge technologies are, if we cannot effectively manufacture the tools to realize those potentials. Our international rivals, specifically China, have invested heavily in exploiting American greed to drive American domestic steel and mining to the brink of collapse by dumping their own steel on the international market for cut-rate prices; craven American politicians and cost-conscious globalists have taken those Chi-Com-financed opportunities to shift massive quantities of industrial demand (and the attendant industrial infrastructure) to the Third World at our real-world expense. NAFTA accelerated this trend even further by incentivizing Mexican development at the expense of American workers, but even so, American demand for steel and metal remains high. Dissatisfaction with the results of globalization has twice propelled MAGA to victory; Trump knows this quite well.

Trump also realizes one of the key things about heavy industry. Unlike light industrial concerns like textiles, heavy industry isn’t a room full of machines processing a few easily-shipped raw materials into finished goods. Heavy industry takes extensive preparations and requires large, immobile, fixed facilities at multiple points to produce parts, tied together with purpose-built transportation infrastructure, fueled by colossal quantities of energy (another dedicated and immobile service), and ultimately leads to a project where those finished parts are merged into the finished whole product. Shipbuilding, aircraft manufacture, large-scale construction, vehicle manufacture, etc…heavy industry is the lifeblood of a developed economy, even in the 21st century. Heavy industry is strength. It’s self-determination. It’s the ability for a nation to shrug at the globe, say “meh”, and continue its own development. It might not be efficient or clean or safe or particularly attractive, but domestic industrial capacity is one of the key reasons that Russia and Iran have been able to resist global sanctions for decades. In absolute terms, things like “ownership” or financing or even trade agreements are essentially meaningless if the infrastructure and workforce exist, because at the end of the day, those are critical national-security components that can ultimately be nationalized if needed.

Trump, and Nippon Steel, recognize this. They are in a similar boat, in that they see the demand for steel in the United States and North America, but did not have a readily-available way to provide domestic steel for that market. Nippon Steel is a powerful regional concern and boasts financial stability better than U.S. Steel, but in the event of a shooting war with China, the Japanese know full well that their current model of exporting high-quality steel and finished goods to the rest of the world will be effectively impossible; Japanese industry would probably be heavily damaged physically in a war by Chinese strikes; the same goes for the South Koreans, Vietnamese and Taiwanese to similar extents. For Nippon Steel, the U.S. Steel merger offers them well-developed infrastructure in a safe location, a dedicated and low-cost workforce, and ready access to safe markets and end users that will benefit both Nippon Steel and Japan (and the United States). For U.S. Steel, the merger means that American steel mills and the steel industry stay in business, instead of shutting down even more, and for the United States, this means that people stay employed, communities remain intact and ultimately the national-security infrastructure that steel industry supports remains viable. It’s hard to build a carrier, it’s a lot harder to build a carrier when there’s no domestic steel. That’s a quarter-right, at least.

Where the other quarter comes in is that Trump chose today to announce more tariffs, doubling the import duties on foreign steel from 25% to 50%. This is what tariffs are intended for- to protect American businesses from artificially-cheap foreign competition. U.S. Steel was strangled by cheap foreign steel subsidized by Communist central planning and slave labor; those are still real threats. Installing a protective tariff gives U.S. Steel (powered by Nipponese capital, and generating profits both at home and in Japan) a shield to protect its domestic market share, allows an opportunity (in both time, workforce and market access) to develop more-advanced product lines, and it incentivizes American (and North American) buyers to source American steel to avoid paying those tariffs. I’d even go so far as to say Trump is two-thirds right on these.

At the end of the day, I did find a certain brutal irony in Trump’s bloviations about how this merger was the exemplar of MAGA. I mean, at the end of the day, U.S. Steel is an American institution. Pittsburg steel mill workers built this nation, quite literally, with hard work and hot steel and billions of tons of steel that forged the keels of everything from Grandpa’s pickup truck to all three Enterprises (CV-6, CVN-65, CVN-80) and gave the Pittsburg Steelers a mascot. Now, this Peak Americana Maximus is going to be brought to the world by Toyota. Not that that’s a bad thing…anyone else picturing this with anime characters?