The politics surrounding Nippon Steel Corp.’s controversial bid for United States Steel Corp. evidently haven’t improved since November’s election. Here’s what else hasn’t improved: the tortured rationale for rejecting the deal.

Bloomberg News reported Tuesday that President Joe Biden plans to block the $14.1 billion acquisition later this month. Although the Committee on Foreign Investment in the United States — which evaluates such deals for national-security risks — hasn’t issued a formal recommendation, Biden insists that U.S. Steel should be “domestically owned and operated.”

President-elect Donald Trump reiterated his own opposition earlier in December. And the powerful United Steelworkers union dismissed Nippon Steel’s latest attempt to sweeten its offer, which now includes nearly $100 million in bonuses for U.S. Steel employees if the merger goes through.

What the deal’s voluble opponents still haven’t done, a year after it was first mooted, is lay out a convincing case for how selling U.S. Steel would undermine national or economic security — the notional reasons for rejecting it.

The Defense Department sources precisely none of its steel from the company. Meanwhile, Japan relies crucially on the American security umbrella, buying virtually all of its imported arms from the U.S.; it has no incentive to weaken the U.S. military or defense industry. Nippon Steel has equally little reason to impede U.S. demand for critical infrastructure or anything else: It launched its bid in the first place because it sees more growth potential in the U.S. than in Japan.

If anything, approving the deal would make the U.S. stronger. The merged company would form the world’s third-largest steelmaker, better able to take on China’s dominant producers. Nippon Steel has the technology and the money — its profit per ton is double that of its nearest competitors and nearly four times as high as U.S. Steel’s — to upgrade the latter’s aging blast-furnace operations, making them cleaner and more productive. It has already committed to invest $2.7 billion, including in Midwestern factories the union fears could be phased out.

American workers would benefit as well. Those plants are more likely to be shut if the deal falls apart, which is why many local union leaders favor the buyout. Nippon Steel has promised to protect jobs under the current union contract and to maintain U.S. Steel’s headquarters in Pittsburgh. Trump’s pledge to revive the company with “tax incentives and tariffs” is hot air: Compared to 2017, just before he imposed steel tariffs on friend and foe alike, employment in the industry hasn’t budged.

The costs of such grandstanding, on the other hand, will be very real. A merger with U.S.-owned Cleveland-Cliffs Inc. — the union’s preference — would create a monopoly in some steel products, raising prices for manufacturers and consumers and potentially affecting far more jobs than the roughly 10,000 union workers at U.S. Steel.

Allowing politics to infect the CFIUS process could prove even more insidious. The U.S. gains greatly from being the world’s top destination for foreign direct investment — as Trump, who has promised to clear red tape for anyone willing to invest $1 billion in the country, seems to understand.

Wielding this process for protectionist purposes will only deter future investment. An arbitrary decision also threatens to fray ties with Japan, whose help the U.S. urgently needs to secure critical supply chains, tighten export controls, coproduce weapons and repair naval ships. Anything that undermines the alliance will make the already challenging task of deterring China measurably harder.

The partnerships Biden has forged in Asia have bolstered America’s hand in the region more than any other action his White House has taken. It would be foolish and shortsighted to weaken them as one of his last acts as president.

_____

The Editorial Board publishes the views of the editors across a range of national and global affairs.

_____

©2024 Bloomberg L.P. Visit bloomberg.com/opinion. Distributed by Tribune Content Agency, LLC.