In the run-up to the 2024 election, both presidential candidates – and President Biden himself – have pledged to block the sale of U.S. Steel to its Japanese counterpart, Nippon Steel. The political maneuvering began in December 2023, when U.S. Steel agreed to sell itself to Nippon Steel, Japan’s largest steelmaker. U.S. Steel shareholders approved the $14.9 billion deal in April 2024, but the takeover faces strong union opposition.
In September, Biden announced his intention to block the takeover and warned Nippon Steel by letter that the U.S. government considered the sale a national security threat. Presidential candidates Donald Trump and Kamala Harris have similarly pledged to oppose the deal. In a Labor Day speech to union workers in Pennsylvania – home to the U.S. Steel headquarters and a must-win state for both candidates – Harris declared that it was vital for the company to “remain American-owned and American-operated.” Donald Trump has repeatedly pledged to block the sale, using strong, nationalistic statements. “I will stop Japan from buying United States Steel,” Trump said. “They shouldn’t be allowed to buy it.”
Why is U.S. Steel in the spotlight?
Despite Japan’s status as a primary U.S. ally in the Indo-Pacific region, the language in the response to the proposed merger echoes the U.S.-Japanese economic rivalry of the 1980s. While Nippon Steel is Japan’s largest steelmaker, it is a publicly owned firm that trades on the New York Stock Exchange. The U.S. Department of State describes the U.S.-Japan alliance as “the cornerstone of U.S. security interests in Asia.”
Nonetheless, an initial review by the Committee on Foreign Investment in the United States (CFIUS) raised concerns that under foreign ownership, U.S. Steel would be less likely to seek tariffs on imports of Chinese steel and might limit domestic production. In response to this interagency review, Nippon Steel has pledged billions to update facilities that would otherwise be idled, and promised to retain U.S. Steel’s Pittsburgh headquarters.
The Japanese steelmaker also said it would work with existing unions, and allow management independence in seeking trade protection. Nippon Steel argued that instead of weakening the U.S. steel industry, the merger would “enhance the U.S. steel industry’s competitiveness and resilience against China.” For its part, U.S. Steel has suggested that without a sale and the promise of investment, the company will consider leaving Pennsylvania and closing many of its blast furnace facilities.
Are voters concerned about this proposed merger?
When the issue hit the news cycle in mid-July, coverage was relatively light but tightly linked to the Biden administration and Harris campaign – as well as to the states of Pennsylvania and Ohio. A search of the New York Times archives from July 20 to Oct. 18 returned 22 articles on the merger, half as much as “port strikes” (48 articles). Coverage of the potential merger was drowned out by discussion of Trump’s tariffs (932 articles). One article noted that the discussion about national economic and security concerns of the merger was “dwarfed” by presidential politics in swing states.
Do the presidential candidates’ pledges reflect public sentiment or assessments by elites? To study what experts think, we first drew on an existing survey of 40 economists conducted by the University of Chicago Booth School’s Kent A. Clark Center for Global Markets in early January. Replicating and expanding on their questions, we surveyed international relations (IR) scholars across the United States as part of the TRIP XXI Snap Poll. From an initial sample of 5,026 scholars contacted from Oct. 9 – 18, 2024, 705 responded. To study public sentiment, we fielded the same and additional questions as part of a survey conducted by the Foreign Policy in a Diverse Society Project. This public survey was a nationally representative, probability-based panel survey of 1,000 U.S. households fielded by NORC at the University of Chicago in early October as part of their October wave 1 Amerispeak Omnibus.
We asked specifically about the impact on jobs
The survey of the general public began with an initial engagement question: How much have you heard about the proposed acquisition of U.S. Steel by the Japanese firm Nippon Steel? We found that the majority of respondents say they know little to nothing about the deal, with 58% answering “nothing at all,” 18% “a little,” and only 23% answering “some” or “a lot.”
All three surveys asked about participants’ expectations for the merger’s effect on U.S. employment. While the typical public response was uncertainty (56%), 27% agreed that the merger would lead to substantial employment loss, and only 12% disagreed. On the employment question, the majority of IR scholars were also uncertain (45%), but far more disagreed (38%) than agreed (14%) that the merger would lead to employment losses.
In contrast, the majority of economists (61%) disagreed with the statement that the merger would lead to substantial job losses, yet a surprising number also said they weren’t sure (35%). (These responses are shown in the figure below.) One respondent wryly noted, “Nippon has not shared its plans with me.” Still, a number of others noted that it was unclear why Nippon Steel would invest only to lower production and pointed out that the company’s prospects without investment were more likely to lead to employment losses.
The divisions between the American public and the academics was starker when participants responded to a question about how the merger would affect the U.S. economy: Do you agree or disagree that the proposed acquisition of U.S. Steel by the Japanese firm Nippon Steel would cause no measurable harm to the American economy?
On this question, 58% of the public expressed uncertainty, while the rest were relatively evenly split between agreement (16%) and disagreement (22%) – see figure below. In contrast, fully 52% of IR scholars and 82% of economists expressed agreement with the expectation that the merger would cause no damage to the American economy. One economist, for example, stated that it was “[h]ard to see why a change of ownership of one firm could do that much damage to the entire economy.”
How scholars see the security concerns
Security, rather than economic concerns, form the stated basis for the Biden administration’s position against the acquisition. For critical products like steel, the CFIUS review and other scrutiny measures make sure that foreign ownership of a U.S. facility would not harm U.S. security interests, infrastructure, or supply chains. Yet the majority of IR scholars agreed that the acquisition would not measurably harm U.S. security, while most of the respondents in the public survey were uncertain (the Kent A. Clark survey did not pose this question to economists).
The combined survey results suggest, at best, a very narrow set of regional and union interests in favor of blocking the Nippon Steel sale. Even after media and political attention, the public remains uncertain about the effect of this purchase. Academics lightly (IR scholars) or strongly (economists) disagree with the economic premise that the merger will hurt U.S. employment and the overall economy. Thus, the combined pledge by both the current president and whichever candidate wins the election to block the sale seems focused on a very small portion of the American public, for perhaps a very limited period of time.
In September, Biden agreed to give Nippon Steel an additional 90 days to refile its application with CFIUS, pushing the deadline for a final decision past the Nov. 5 elections. We asked the general public what they thought presidential candidates would do if elected, given that both Harris and Trump have promised to block the takeover. On average, respondents placed the probability of a Harris administration blocking the deal at 46% and the Trump administration blocking the deal at 57%. Time will tell.
Alexandra Guisinger is an associate professor of political science at Temple University, co-principal investigator of the Foreign Policy in a Diverse Society (FPDS) project, and author of “American Opinion on Trade: Preferences without Politics” (Oxford University Press, 2017).
Katja Kleinberg is an associate professor of political science at Binghamton University (SUNY) and co-principal investigator on the Foreign Policy in a Diverse Society (FPDS) project.
Anna Rowland is a graduating senior in the political science department at Temple University.
