After Joe Biden officially blocked the takeover of U.S. Steel (Pennsylvania-based company) by Nippon Steel (Japan-based), PA Gov. Josh Shapiro released a statement, pledging to work “with all parties involved” to protect steelworkers jobs from threatened layoffs.
Here’s his official response, delivered via X and his state government page.
My statement on President Biden’s action to block the U.S. Steel and Nippon Steel transaction. pic.twitter.com/inljvfffSI
— Governor Josh Shapiro (@GovernorShapiro) January 3, 2025
The New York Times has a good read on the fallout of the deal’s falling apart, including the potential for fraying a bit the U.S.-Japanese relationship.
That seems overblown.
But here’s the thing that’s not overblown – this further signals both parties’ isolationist bents, which reflects the US population as a whole.
2028 TAKE-AWAYS:
Shapiro is in a tricky spot.
On one hand, powerful union interests in Pennsylvania and throughout the country oppose the deal. The very name U.S. Steel provokes a powerful visceral response for Americans and the union workers Democrats desperately hope to win back (the company was founded in 1901 and played a huge role in WW2 efforts).
Even the iconic Pittsburgh Steelers logo is based on the Steelmark logo, originated by US Steel. So this is no everyday acquisition target.
On the other hand, as governor, Shapiro has to take seriously the threat that the blocked acquisition could lead to a loss of jobs.
U.S. Steel’s CEO David Burritt told CNBC in September of 2023 that, “while it may sound sexy for it to be a company that stays the same, we won’t be able to succeed without Nippon.”
He said the transaction would save jobs, and pointed to Nippon’s commitment to invest $2.7 billion in U.S. Steel’s struggling mills as an example. When asked why U.S. Steel cannot make these investments, Burritt said the company has an obligation to shareholders.
If workers are laid off, that bodes poorly for Shapiro. Unemployment in a key region (western PA) might rise.
If he supported the deal, that would bode poorly for Shapiro – if not on the merits – then certainly the optics, as he campaigns nationally in 2028.
The only silver electoral lining for Shapiro is that Donald Trump also promised to block the deal, so it has no shot of succeeding and there’s bipartisan presidential opposition to it.
Shapiro certainly wouldn’t score points in a 2028 primary if he supported the deal, and he probably won’t lose any points in a 2028 general election, considering the GOP’s current isolationist bent.
