On December 2, President-elect Donald Trump wrote:
I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan.
So you would expect that he would dislike foreign investment in the United States, right?
Wrong. Donald Trump says he wants more foreign investment. In “Why Trade Should be Free,” Defining Ideas, October 30, 2024, I wrote:
In his recent appearance before the Economic Club of Chicago, Trump said he wants to impose high tariffs so that foreign firms will move their production to the United States. In other words, he wants more foreign direct investment.
If you click on his speech in the link directly above, go to about the 11:30 point where he says that to avoid tariffs, foreign companies need only build their plants here. Not buy their plants here. Oh, no. Build their plants here. He never explains why he wants foreign investors to build, but not buy.
Vice-President-elect JD Vance used to understand why it was good for the United States if the government allowed foreign companies in Japan to buy domestic firms that were in danger of shutting down. As Eric Boehm of Reason wrote on December 19, 2023, quoting a passage in Vance’s book Hillbilly Elegy:
“The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world,” Vance writes. “If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown’s flagship company probably would not have survived without it.”
Why do I say that Donald Trump is attacking U.S. Steel? Because he doesn’t want to allow its owners to sell. Ultimately, he’s attacking their property rights.
READER COMMENTS
Craig
Dec 3 2024 at 10:15pm
https://www.cfr.org/in-brief/why-biden-wants-block-nippon-us-steel-deal
Biden also opposes the deal.
Jon Murphy
Dec 4 2024 at 6:50am
Several folks have made that same argument and I moved have gotten a good explanation why creating jobs via investment was a bad thing (“selling off productive assets” as one person put it) but creating jobs via new building was a good thing.
MarkW
Dec 4 2024 at 7:12am
To paraphrase Upton Sinclair — it’s hard to get a politician to remember something when his re-election chances requires him to forget it.
It seems the economics and politics will always be at loggerheads so long as the general public’s understanding of economic issues remains so misguided. The one ray of hope — voters expect politicians to enact their preferred protectionist, interventionist policies, yes, BUT they also will punish politicians at the polls who fail to deliver a strong economy. So politicians are faced with the task of making a show of implementing some number of bad, but popular economic policies while at the same time keeping most of the economy unencumbered. It’s a tricky balance that inherently requires a lot of hypocrisy. Fortunately, that trait is not in short supply among the political class.