Is it bad for the U.S. that a Japanese automaker such as Honda builds millions of cars in America — in five American states — employing thousands of American workers? If it isn’t, then why would it be bad for Americans for a Japanese steelmaker to invest in America?
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Nippon Steel wants to do what Honda — and Nissan and Toyota — have done: invest in America. Specifically, Nippon Steel wants to invest $15 billion in U.S. Steel, which would help U.S. Steel continue to make steel in America — so that Americans don’t have to buy as much steel from China.
A country that’s not an ally of the United States, as Japan is.
China benefits from most-favored nation (MFN) trading status, which has encouraged the wholesale exporting of American industries — along with the jobs Americans used to have — to China, a country that doesn’t invest in America or American jobs.
Because the Chinese put the interests of China first.
Japan, on the other hand, has put billions into America via automotive manufacturing jobs alone. Toyota Motor Manufacturing — located in San Antonio, Texas — employs about 10,000 Americans directly. A new Tundra pick-up or Sequoia SUV rolls off the line every 60 seconds. The workers who build these trucks and SUVs are able to buy them because they have good-paying jobs that put them in a position to be able to afford them.
Ask a former steel worker who used to have a good-paying job — who now has a minimum wage job as a Walmart greeter because his job got exported to China — whether he would like to have his job making steel in America back.
Almost no one objects to all the jobs created by Japanese automakers who’ve invested in America, so it’s odd to see the objections emanating from both the right and the left to the proposed investment by Nippon Steel in America.
Donald Trump has pledged to block Nippon Steel’s investment in U.S. steel if elected president. This is circular firing-squad protectionism that doesn’t serve America’s interests because it will not help Americans. And not only because it will cost them steelworker jobs that either won’t be created or that will be lost, but because U.S. Steel can’t afford to keep paying American steelworkers to do what Chinese steelworkers can do for less.
And then charge Americans more — for the steel.
It could very well cost Americans other jobs — in other industries — as well. The ones that Japanese companies shy away from attempting to invest in, given the political hostility to such investment. Kenichiro Sasae — former Japanese ambassador to the United States during Trump’s first term — told Reuters that if the Nippon Steel deal is thwarted by protectionist politicians, it could be seen as a “warning” to Japanese investors generally. No sensible person — or company — seeks to go where they’re not wanted.
Much less put their money there.
Instead, protectionist politicians seem to want America to be dependent upon Chinese-made steel instead. It’s apparently OK to import steel from an economic and political (as well as military) rival like China but not OK to greenlight a venture that would result in more steel being made in America, by Americans working with a Japanese-based company that wants to make money with rather than off Americans.
If it’s dangerous to American interests for Nippon Steel to invest in American steelmaking, then by implication it must also be dangerous for Japanese automakers such as Honda, Nissan, and Toyota to make vehicles in America. How about Honda’s recent investment in General Motors? The Japanese automaker is buying EV technology — GM’s Ultium battery — as the underlying platform of its first electric vehicles. In fact, the 2024 Honda Prologue is basically a Chevy Blazer EV, rebadged.
Should Honda be prevented from investing in GM?
“Failure to strike a deal has the potential to damage investment ties and set back friendshoring initiatives,” Stefan Angrick, senior economist, told Reuters.
Maybe Honda — and Toyota and Nissan — would be better served moving their U.S. manufacturing facilities to China. It would probably save them a lot of money — at the cost of thousands of American jobs.
Of course, almost no one on the left or the right (or anywhere else on the political spectrum) is suggesting that these Japanese companies be pushed out of America — along with the tens of thousands of jobs Americans would no longer have. That would benefit no one, except perhaps the Chinese.
So why the bipartisan hostility toward the Nippon Steel deal? Perhaps because steel is seen as an “American” industry. That was once true of the car industry. What’s changed is that Americans who lost their jobs making American-brand cars can now make a good living making Japanese cars, right here in America.
They could also be making steel. And that would arguably be good for America.
