US President Joe Biden recently blocked the acquisition of US Steel by Japan’s Nippon Steel. While commenting on his decision, Biden said:
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
The US Steel CEO and President, David B. Burrittwas critical of Biden’s decision. Both US Steel and Nippon Steel have said that they would be left with no option but to go to court. A joint statement issued by US Steel and Nippon Steel said:
“The president’s statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision. We are left with no choice but to take all appropriate action to protect our legal rights.”
Senior officials in the Japanese government have expressed the apprehension that the decision of the Biden Administration will impact Japan-US economic relations in the future. During the previous Trump presidency, differences between Tokyo and Washington over key economic issues – especially Trump’s decision to improve tariffs – led to strains between the US and Japan.
Ever since the announcement — in December 2023 — by Nippon Steel that it will take over Pennsylvania based US steel there has been a bi-partisan consensus — in the US — as far as opposition to the deal is concerned.
While incoming US President Trump, who will take over later this month, and Biden may not agree on several things, they have been on the same page on this issue.
Biden’s stance on Nippon steel’s acquisition of US steel clearly reiterates the point on how over the past decade the economic mood in the US has changed, with both Democrats and Republicans beginning to adopt an insular stance on crucial economic issues.
The debate pertaining to H-1B visas
Recently, senior Democrat leader and Senator from Vermont Bernie Sanders was critical of the H-1B visa system. His views pertaining to H-1Bs are not very different from those of many – especially Trump supporters — within the Republican Party. Sanders disagreed with CEO of Tesla and incoming head of the Department of Government Efficiency (DOGE) Elon Musk who had defended the H-1B visa system, saying that the H-1B visa arrangement enabled US companies to hire individuals with skills and talent. Sanders said that H-1B visas were only beneficial for US billionaires. The US senator also said:
“The main function of the H-1B visa program is not to hire ‘the best and the brightest,’ but rather to replace good-paying American jobs with low-wage indentured servants from abroad.”
Trump, who has been critical of H-1B visas in the past, recently defended H-1B visas. His advisor, Steve Bannon however, has criticized H-1B visas and said that this system needs to be dismantled. Bannon lashed out at Musk for his views in favour of H-1B visas. Other Making America Great Again – MAGA — supporters have also been critical of Musk and been unhappy with the induction of certain individuals — such as Sriram Krishnan as Senior Advisor for Artificial Intelligence — in the Trump team.
Growing convergence between Democrats and Republicans on key economic issues
Even on issues like trade agreements, the Republicans and Democrats have been on the same page. While the Trans-Pacific Partnership (TPP) — now referred to as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), was a brainchild of former US President Barack Obama, the Democrats have disowned the same. During the presidential electoral campaigns of 2016, 2020 and 2024 the Democrats distanced themselves from the TPP. Both Bernie Sanders and Hillary Clinton, the presidential candidates of the Democrats in 2016, have been critical of the TPP.
One of the first decisions Trump had taken during his previous presidential stint was US withdrawal from the TPP. This move sent the wrong signals to US allies and partners – especially in Asia. Trump has also stated that the US would pull out of the Indo Pacific Economic Framework (IPEF), signed by the Biden Administration with 14 countries — Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam, and United States.
In conclusion, some of the recent developments discussed earlier in the article clearly reiterate that there is a growing tendency towards insular economic policies in the US. This tendency is visible in other parts of the world as well. The key reason for this is the rise of populist politics and the success of the skewed ‘anti-globalization’ narrative. Divergences between the US and its allies – in Asia and Europe — over key economic issues could rise during Trump’s second stint, and China is likely to take advantage of the same.
