Even though the Committee on Foreign Investment in the United States continues to review Nippon Steel’s $14.1 billion acquisition of U.S. Steel, President Joe Biden is reportedly planning to block the deal even if CFIUS approves it. Reading between the lines of state media, no one is happier than the Chinese Communist Party.
Earlier this month the South China Morning Post, which is owned by a Chinese tech company and known for “improving China’s image overseas and combating what it sees as anti-Chinese bias in the foreign media,” published an article about how politics around the deal have “cast doubt on its viability.”
A September South China Morning Post headline declared, “Cooperative Tokyo finds America a demanding, but ungrateful boss.” The sub-header managed to insult both the U.S. and Japan, suggest the deal is dead, and characterizes efforts to counter China as fruitless: “After doing everything to please Washington with its China containment, Japan is not allowed to buy US Steel that has been in decline for decades.”
The column celebrates the Biden administration’s mistreatment of Japan. “By bending over backwards to placate Washington, even to the extent of compromising its own economic and national security – most noticeably in the banned sales of advanced computer chips to China, this is what Japan gets in return,” writes the columnist.
China Daily, a mouthpiece for the Chinese regime, has also exploited the politics of the deal. “Biden’s nixing of steel deal reveals little trust in ally,” reads one headline that is all too eager to sow discord. The piece argues that “even though Japan is a close ally of the US, that it has still not won the trust of US policymakers is clear to all.”
The Chinese Communist Party has been energized to see President Biden undermine a deal that would strengthen the American steel industry and forge stronger competition against the Chinese companies that dominate the global market.
Every year, China produces as much steel as all other countries combined. Most of China’s steel stays in the country for domestic consumption, but even its relatively small level of exported steel exceeds the total amount of steel produced by the U.S. or Japan on an annual basis.
But a combined U.S. Steel and Nippon Steel would be the second largest steel company in the world, trailing only one Chinese company. The acquisition would enhance competition against Chinese dominance while strengthening ties between the U.S. and Japan.
Of course, China would like to prevent America from becoming even closer to its most important ally in Asia. A weak U.S.-Japan alliance is key for China’s ability to project strength in Asia and beyond. But a stronger alliance between our two democracies would complicate Xi Jinping’s plans to increase China’s relative power.
The proposed deal would have benefits beyond geopolitics. Domestically, the acquisition would provide job security for thousands of steelworkers, billions of dollars in investment for aging steel plants, and certainty for an iconic American company.
If President Biden surrenders to union bosses (many rank-and-file employees of the union support the deal), the likely result would be job losses, a weakened American steel industry, and strained relations with our most vital ally in the struggle with China. It would also clear the way for continued Chinese dominance in steel production and manufacturing.
President Biden should use his final days in office to approve the U.S. Steel deal and give the Chinese Communist Party something to complain about in their newspapers.
This article was originally published at www.dailysignal.com
