IT CAME TO THIS LONG AGO.

United States Steel recently agreed to be purchased by Nippon Steel, to the immediate dismay of populist senators J. D. Vance and John Fetterman, both with roots in traditional steel towns.

It is yet another illustration of how the populist right is merely recycling the flawed economic policy ideas of the far left.

For example, here's how progressive Sen. John Fetterman (D–Penn.) reacted to the news: "It's absolutely outrageous that [U.S. Steel] have sold themselves to a foreign nation," Fetterman said in a video recorded, somewhat bizarrely, on the roof of his house. "I am committed to doing anything I can do, from using my platform or my position, in order to block this."

If those statements were swapped, would you be able to tell the difference? Fetterman and Vance engage in the exact same set of fallacies, using almost exactly the same words to engage in some light xenophobia and some promises of heavy-handed government action.

Unsurprisingly, prominent figures of the so-called "New Right" jumped to praise Fetterman. "I'm starting to like this guy a lot," Compact magazine founder Sohrab Ahmari posted on X (formerly Twitter), referencing Fetterman's video statement.

This is all quite silly. America's interests are not served by having two supposedly rival political movements committed to seeing foreign investment as a threat to the country's sovereignty or American workers.

It's not as if we didn't see something like this coming, long ago.  In February 2022, policy wonks Rosemary Bezy and Patricia DeMarco expressed dismay when U. S. Steel built new capacity in ... Arkansas.

It has been more than two months since U.S. Steel announced that it was investing $3 billion in Osceola, Ark., to build an advanced steelmaking facility, and not one regional leader has said a word about this situation.

Our political leaders seem to want to avoid questions about how we ended up here: the abandonment of Mon Valley communities and their highly skilled, unionized manufacturing workforce. U.S. Steel will shift its investments to a right-to-work state where it will employ 600 nonunion workers to replace the same steelmaking capacity of the Mon Valley, where 3,500 workers face an uncertain future — all while U.S. Steel also starts selling off its pension obligations.

The silence insults the generations of workers who sacrificed their health and their lives to build the infrastructure of our country and the historic prosperity of our region.

We can't bring back those workers or their health, but we can note that U. S. Steel is still slow to adapt.  It's probably still heretical in the union halls of the Mon Valley or to the northwest along the Mahoning to say Nucor-Yamato.  Never mind that Nucor and Yamato established a joint venture to recycle scrap into heavy structurals a quarter century ago in Blytheville, Arkansas.

Last fall, Salena Zito sounded the alarm that the company was in play.

That imagery may once again be about to change as U.S. Steel contemplates a sale, which would be a jolt to this region. The company is taking proposals from multiple bidders, including Ohio steelmaker Cleveland-Cliffs as well as a rumored bid from a steelmaker based in Europe.

The United Steelworkers Union supports a deal with Cleveland-Cliffs, which extended an offer of shares and cash worth $7.3 billion to buy U.S. Steel Corp. in July and promised to honor the steelworkers union contract, which expires in 2026.

The Cleveland-Cliffs CEO told the steelworkers last month in a letter to them, "I have your backs."

The inevitability of the end of U.S. Steel in Pittsburgh has always been a rumor, but workers here two years ago knew the reality was near when a planned $1.5 billion renovation of the region's blast furnaces evaporated under political pressure related to climate change.

So where did that 1.5 billion investment money and jobs go? In modern mini steel mills in Arkansas.

I don't understand why people working the continuous caster in Arkansas are any less part of building America than their predecessors at Homestead or Edgar Thomson were.  Nor that anyone is troubled by other international steel companies, including Arcelor Mittal, were also shopping for U.S. Steel, nor did anybody notice that Cleveland-Cliffs used to be the iron ore division of Republic Steel, which, to the extent there are any properties in operation, has sold plants to inter alia Mittal.  When J. D. Vance sounds like the circa-1980 Robert Reich and Ira Magaziner, dear reader, perhaps it's time to worry.

“In hindsight, the steel industry was but the canary in the coal mine, the first victim of what a growing consensus now recognizes as deindustrialization wrought by hostile foreign competition,” the Ohio Senator continued. “But the plight of this once-dominant corporation reveals how American industrial might can be undermined by forces both foreign and domestic—including our very laws.”

Yes, Senator Vance, it was our very laws, but not the ones you had in mind.

More government intervention is not going to save U.S. Steel. Indeed, decades of protectionist policies seem to have contributed to its downfall.

"Arguably, US Steel has been a disappointment since the day it was formed," writes Brian Potter, a senior infrastructure fellow at the Institute for Progress, in his Construction Physics Substack newsletter. "The company's large size made it unwieldy to manage, and it was late to every major advance in steelmaking technology of the last 100 years, from continuous rolling to the basic oxygen furnace to the minimill….As far as I can tell, no major steelmaking technology over the last century came out of US Steel."

Though U.S. Steel enjoyed global dominance in the aftermath of World War II, in no small part because the war had wrecked large portions of Europe's and Japan's industrial bases, it was already on the decline by the 1960s and early 1970s. After Nippon—the company now poised to buy out what remains of U.S. Steel—surpassed it as the world's largest steel company in 1971, U.S. Steel responded "not by trying to improve their operations, but by demanding government protection from 'unfair' foreign trade practices," writes Potter.

Thus began a 50-plus-year effort by the federal government to prop up U.S. Steel. Those interventions have taken many forms, including "hundreds of import restrictions; tens of billions of dollars in state, local and federal subsidies and bailouts; exemptions from environmental regulations; special 'Buy American' rules just for integrated steelmakers like U.S. Steel; and federal pension benefit guarantees," wrote Scott Lincicome, vice president of the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, in a 2021 rundown on how protectionism had failed American steel companies and their employees. Even before President Donald Trump slapped 25 percent tariffs on nearly all imported steel, about half of all anti-dumping tariffs imposed by the federal government were aimed at various types of foreign-made steel, according to Lincicome.

And buckle in, the Jarrett regency still has hopes of flipping Ohio in the presidential, never mind how much more food stamp recipients will have to spend on canned goods.

The Commerce Department has officially declared a trade war on cheap tin cans.

Last week, the department gave a green light to placing new tariffs on tinplate steel—the metal used to manufacture tin cans and a wide variety of other consumer goods—imported from Canada, China, Germany, and South Korea. While the new tariffs are far less extensive than the absurdly high trade barriers originally requested by Cleveland-Cliffs, an Ohio-based steel company that is one of the few companies in America to make tinplate steel, the tariff decision once again underlines the arbitrary and cronyist nature of federal trade policy.

As Reason previously reported, Cleveland-Cliffs had asked the Biden administration to slap tariffs of up to 300 percent on tinplate steel imported from eight countries. Because the tariff-petition process is heavily skewed in favor of companies seeking protectionism—among other things, the Commerce Department is forbidden from considering how higher tariffs might impact other parts of the economy, including consumers—industries that need reliable access to tinplate steel were prepared to take a hit.

The Consumer Brands Association (CBA), which represents more than 2,000 companies including Campbell Soup Company and other brands that stood to be harmed by the tariffs, estimated that Cleveland-Cliffs' proposed tariffs would have added about 58 cents to the cost of the average canned food product. A separate study by the Trade Partnership Worldwide LLC, a pro-trade think tank, found that 600 jobs would be put at risk for every steel-making job protected by the proposed tariffs.

Last week's announcement from the Commerce Department triggered sighs of relief. The department rejected Cleveland-Cliffs' proposal for tariffs on tinplate steel imported from the Netherlands, Taiwan, Turkey, and the United Kingdom, and the tariffs approved on other imports are significantly lower than what had been requested.

I'm not sure how putting tariffs on tinplate from Canada, which has been the largest source of steel imports, even back in the days when I was doing my empirical research and Robert Reich was pushing his industrial policies, but not on tinplate from the United Kingdom or Taiwan, makes any sort of strategic sense.

That, though, is the illogic of protectionism, or is it the political economy of protectionism.  Meanwhile, good old creative destruction, not dumping from Pacific Rim countries, brought the legacy steel companies low.

[I]n the late 1960s, a new type of steelmaking facility began to appear, the minimill. The minimill made steel not by processing iron ore, but by remelting scrap steel in an electric arc furnace. By eliminating the blast furnaces which turned iron ore into pig iron, minimills were not only much cheaper to build than integrated steelworks (as little as 1/10th the cost per ton of steel they produced), but they could profitably be built much smaller. And the scrap steel they required was widely available thanks to the previous transition to the BOF, which used much less scrap than the open hearth it replaced.

Because scrap steel was often contaminated with other metals such as copper that couldn’t be easily separated, minimill steel was initially lower quality than BOF steel, and minimills were only competitive in products where such quality didn’t matter, like concrete reinforcing steel. But as minimill technology improved, they began to take more and more share from large, integrated steelmakers like US Steel. Between 1974 and 1994 steelmaking capacity of integrated producers fell by more than 50%, while the capacity of minimills increased by 360%, reaching 30% of American steelmaking capacity.

That excerpt is from the aforementioned Construction Physics essay, and it comes after a lengthy recitation of the history of Big Steel's liquidation.  I'd add only that electric furnaces with capacities comparable to the early basic oxygen furnaces were in operation in the 1950s, and that Nucor's venture into reinforcing bar and light structurals did more to end the importation of cheap communist steel (from Poland in the 1960s) than all the trade hearings in Washington.

US Steel didn’t adopt the minimill until 2020, when it acquired a minimill company and built its own minimill in Alabama. (Minimills now produce around 25% of US Steel’s domestic output.) Companies like Nucor beat it to the punch with things like thin slab casting technology.

U. S. Steel did essay a minimill-style operation in Baytown, Texas, but in the 1980s the company was already having trouble raising capital and coming to terms with its unionized employees, and by 1990 that plant was a North Star Steel property.

I'll conclude with a reference to a Noah "Noahopinion" Smith essay with much more about the current evolution of steel production in North America.  The money quote, for trade hawks, reinforces what I've been telling you above.  It's not, pace Donald Trump, China.

First of all, the big decrease in U.S. steel production happened in the 1970s, when Chinese production was practically nonexistent. But also, the U.S. imports very little steel from China — America’s biggest foreign suppliers are Canada and Mexico, while China is just a footnote.

There's a lot more at the link, including what might be wishful thinking about strategic reshoring and railroad building, but he gets off a zinger. "But if Nippon Steel were trying to buy Nucor, I doubt that John Fetterman and the Pennsylvania Dems would be so up in arms!"  Yamato, on the other hand, might have something to say.