Bootleggers and Baptists in the U.S. Steel Deal
As President Joe Biden continues to mull whether to allow one private steelmaking company to purchase another, it’s worth taking a moment to appreciate the bizarre political alliances that opponents of the U.S. Steel/Nippon Steel deal have forged.
Like the American steelmaking company that’s working with a prominent environmentalist group to lobby the White House to block the deal.
The steel company is Cleveland-Cliffs, the Ohio-based company that lost the bidding war to buy U.S. Steel last year. Since then, Cleveland-Cliffs has been using whatever leverage it can find to get the federal government to block Nippon Steel’s $14.9 billion purchase of U.S. Steel—because if Nippon’s purchase doesn’t go through, Cleveland-Cliffs will be well-positioned to swoop in and buy U.S. Steel at a discount.
The full extent of Cleveland-Cliffs’ efforts was detailed by the Pittsburgh Post-Gazette last week. The rival steelmakers allied with the union representing many U.S. Steel employees, called in favors from Sen J.D. Vance (R–Ohio), and lobbied hard both in public and behind the scenes to call the deal into question. Indeed, it was Cleveland-Cliffs CEO Lourenco Goncalves who pushed the idea that Nippon’s purchase of U.S. Steel could somehow threaten U.S. national security, despite the fact that Nippon is a publicly traded company based in Japan, a close U.S. ally. Nonetheless, the Biden administration has taken that claim at least somewhat seriously.
But perhaps the strangest bedfellows in Cleveland-Cliffs’ effort to oppose the U.S. Steel deal are the Sierra Club and a handful of other progressive environmental organizations. They have lobbied Congress and the Biden administration to block the deal, arguing that Nippon’s promise to invest in the expansion of U.S. Steel’s plants will mean more steel production and, as a result, more pollution.
Nippon’s promised investments i
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