Want to search for posts across your favourite author? Just click on their name to reach their '100 most recent posts' page, and then use the search box located beside their name.
- Manlobbi
Halls of Shrewd'm / US Policy
No. of Recommendations: 2
Sounding like a MAGA
Fetterman says he’ll work to block ‘absolutely outrageous’ US Steel sale
Snip
“Sen. John Fetterman (D-Pa.) vowed Monday to work to block the $14.9 billion sale of U.S. Steel Corp. to Japanese steelmaker Nippon Steel, which he described as an “outrageous” move.
The deal was announced Monday, prompting the stock prices of U.S. Steel to jump up 25 percent. Fetterman criticized the sale, saying in a post on X, the platform formerly known as Twitter, that the move was “wrong for workers and wrong for Pennsylvania.”
https://thehill.com/homenews/senate/4366073-fetter...
No. of Recommendations: 2
Sounding like a MAGA
Sounding like a progressive. The progressive base of the Democratic party has always had a more protectionist bent than the party at large, and certainly more than the traditional conservative Republican party. Trump's political insight was in recognizing that there was strong support for progressive views on trade policy (and Medicare) within the GOP electorate, who weren't nearly as conservative on economic policy as the business wing. He rebranded that progressive protectionism as "MAGA" and ditched that portion of the conservative platform for good.
No. of Recommendations: 3
And it's wrong for national security.
We need to retain some presence in various industries because we cannot rely on foreign producers in a 'crunch'. For example, masks. Most disposable masks were made in Asia. During COVID those nations hoarded them for themselves (of course!). So we had a shortage in this country for months.
We need steel. How much military hardware is made -at least in part- from steel? (Hint: a lot)
We need domestic supplies of electronics components, steel, copper (pretty much any metal you can name), glass, polycarbonate, etc. Almost anything you can think of. If we end up in a conflict with China (which is getting more likely every day), we can't be relying on things that are "made in China", or even Taiwan (too close to China, supply lines could be disrupted).
It's critical that we maintain a domestic source for pretty much everything.
No. of Recommendations: 2
And we are usually late to the gate on national security items needed in a secure supply line. We can also be bamboozled. Mollycorp touted itself as a domestic source for rare earths, built a processing plat with gov help, and it has to send its ore to China to get processed as the plant doesn't work for some reason. Now the gov has teamed up with an Aussie Co called Lynas (working with a US co in Texas) and are gearing up to process ore. Lynas has the expertise necessary to process rare earths economically - which is key. Btw, Lynas was headed for bankruptcy when the new CEO, Amanda Lacaze turned it around. We can't produce everything domestically, but we need secure supply lines as this isn't a friendly world.
No. of Recommendations: 1
And it's wrong for national security.
Is it?
U.S. Steel isn't the largest steelmaker in the U.S. any more. It might not even be the number two steelmaker. It appears that X produces just under 20% of annual steel output in the U.S. Which isn't nothing, but it also means having ownership by Japan might not necessarily present any real national security issues.
AIUI, X has been the industry laggard for a while as well - with declining production over time. So the flip side to the risks of foreign ownership of the company is any possible benefit to increased production from domestic sources rather than relying so much on imported steel.
I suppose that will all come out in a lot of analysis. I don't know the answer, since there's so many different types of steel and the military has very specific needs. But I don't know that it's cut and dried.
No. of Recommendations: 7
I don't know the answer, since there's so many different types of steel and the military has very specific needs. But I don't know that it's cut and dried.
---------------
This is the lesson everyone learned the hard way between 2018 and 2021 after Trump raised tariffs on Japanese steel to "protect" American steel workers. Steel is not steel is not steel is not steel. It's not a totally fungible commodity because there are DOZENS of varieties all used in large quanities that have very distinct properties optimized for different functions. Not every variety can be made by every plant and it is not cost-free to switch from producing one variety to another at a given plant if it is possible at all.
The minute tariffs went up on foriegn steel, who got hammered? American manufacturers who needed varieties of steel only produced overseas. Instantly, prices went up for their raw materials and those hikes flowed directly to the cost of goods sold. That raised prices for those goods IN America and put those makers at a disadvantage in international markets cuz no other makers in other countries faced the same price hike on those varieties of steel.
One of many examples proving that Trump knew nothing about economics and trade then and hasn't learned anything since.
Should this deal be allowed to go through? I'm not sure. I'm not sure how many varieties US Steel still makes and how those fit into any strategic uses for defense (special armor, special needs in ships and submarines, etc.). It could be the case that apathetic management over decades has held off on modernizations and investments and US Steel plants have evolved to only making the cheapest, lowest margin varieties that other makers don't want to waste their modern plants creating that can make higher margin stuff.
In general though, if we learned ANYTHING during the supply chain lockups during COVID, it should have been that there is some theoretical minimum set of "stuff" whose production would likely best remain on domestic shores to ensure access and steady supplies in the event of an extended interruption in international shipping. What if a terrorist bombs a tanker traversing the Suez canal, blocking shipping for 2 months while someone figures out how to cut up the carcass of a dead boat stuck in 72 feet of water? Or if China becomes more aggressive in Southeast Asian waters, having a large share of our domestic steel needs having to thread through that region might not be the best idea in 5-10 years.
WTH
No. of Recommendations: 3
In general though, if we learned ANYTHING during the supply chain lockups during COVID, it should have been that there is some theoretical minimum set of "stuff" whose production would likely best remain on domestic shores to ensure access and steady supplies in the event of an extended interruption in international shipping.
Absolutely. That was my point. Albaby is correct that -perhaps- a Japanese company buying an American company wouldn't pose a problem. But a lot of steel has already left our shores. The behemoth "Bessie" is long gone, for example. And, as you say, no one plant is going to make the variety of metals we need for military (and other) purposes. The Japanese may not want to make the steel we need at the US Steel plants, and that would be a Japanese corporate decision that is beyond our control.
We should assume that China is going to get more aggressive, and that the Suez will be unavailable. If that doesn't happen, great! But we should be prepared for it all the same.
No. of Recommendations: 1
I think examining the supply chains for interruption risks is the way to go. You can mitigate some risk by stockpiling, but not all. As WTH Points out, we cannot afford to do this stupidly, we just hurt ourselves. But when I saw how easily we got conned in the RE sector, I didn't have much hop in the other areas. Is it too much to ask that we have a strategic plan and brilliant people?
No. of Recommendations: 0
Good for him on this one.
But I'm also disappointed he sold out to the Israeli killing machine and Israeli Manipulation machine.
The cause seems to get new supporters but then have a few bought off. Cycle keeps rinsing and repeating.
I still have faith in demography and trends.
No. of Recommendations: 3
In general though, if we learned ANYTHING during the supply chain lockups during COVID, it should have been that there is some theoretical minimum set of "stuff" whose production would likely best remain on domestic shores to ensure access and steady supplies in the event of an extended interruption in international shipping.
True....but remember, it's not like Nippon's purchase of U.S. Steel would result in them taking U.S. Steel back with them to Japan. All of their important physical assets would certainly stay here in the states, which means the production would still remain on domestic shores. Just under different ownership. U.S. Steel doesn't seem like the sort of company that would have massive amounts of intangible or non-physical assets that could be "exported" back to Japan (like IP or technology that might violate export controls) - it's a steel company. So other than the scenario that 1pg mentioned, that Nippon might change the product mix to one more favorable to other uses than military equipment, it's hard to see how a change in ownership would affect the amount of domestic production of steel.
