At Nippon Steel's recent annual meeting, executives minimized the political obstacles to its purchase of US Steel. Executive Vice President Takahiro Mori told anxious shareholders, "Once the US presidential election is over, the political aspect will disappear." Another executive declared: "No matter which candidate becomes President, they will probably take a calm view...after the election." In reality, opposition to the steel merger is not an isolated issue but one of many "canaries on the coal mine" that indicate growing protectionism and nationalism among voters and politicians in both American parties.

            Loss of jobs and income in manufacturing communities--and the failure of either party to take care of displaced workers--have caused white workers without a college degree to look for scapegoats. Throughout the US and Europe, where blue-collar workers have lost jobs due to automation, they have blamed immigrants and imports, and therefore voted for rightwing populists. In reality, the Trump-Biden trade tariffs in steel and other areas have destroyed far more jobs than they have created. But that has not stopped so many of these workers from still believing in false promises. This nationalist populism is the context in which an ordinary merger has been labeled "a national security threat."

            Despite all this, there is still the possibility of the merger going through due to binding arbitration between the steelworkers' union and the steel companies. Hearings for this begin on August 15.

            For details, see https://richardkatz.substack.com/p/nippon-steel-is-canary-in-the-coal

Richard Katz

The Contest for Japan's Economic Future