Nathan Benefield: Bring domestic steel manufacturing into America’s Golden Age

If there is to be a new Golden Age for American industry and manufacturing, Pennsylvania will play a leading role. In recent years, a new investment opportunity has developed that could have a truly transformational impact on Pennsylvania — the proposed investment by Nippon Steel in the iconic U. S. Steel.

U. S. Steel was once the largest producer of steel in the world and the largest U.S. employer. This giant is deeply ingrained in the identity of western Pennsylvania. But like many heartland industries, Pennsylvania’s domestic steel sector has faced challenges in recent years. Today, U.S. Steel employs fewer workers and ranks lower among the world’s steel companies worldwide.

Fortunately, with the support of our leaders in Pennsylvania and Washington, D.C., U. S. Steel could galvanize a rebirth of the American steel industry. Nippon Steel, a well-regarded and innovative Japanese steel company, has proposed a sizable investment in U.S. Steel. In late 2023, Nippon Steel made a nearly $15 billion bid for U. S. Steel, which included key commitments to invest in existing factories, union employees, and local communities.

Unfortunately, President Joe Biden unwisely blocked the investment and prevented a U. S. Steel revival. Misguided electoral politics complicated the deal, with calls from both sides of the aisle feigning concern about U.S. Steel “staying American.”

Prominent Pennsylvania lawmakers also played petty politics. Gov. Josh Shapiro openly admitted he was “not happy” with the acquisition because powerful union executives opposed it. Instead, he supported an alternate deal from a buyer who offered pennies on the dollar compared to Nippon. Meanwhile, rank-and-file union steelworkers in Pennsylvania overwhelmingly support the Nippon deal. Unfortunately, Shapiro caved to out-of-state labor bosses rather than fighting to protect Pennsylvania jobs and our economy.

Now, President Trump has an opportunity to forge a deal that benefits Pennsylvania’s economy, protects the livelihood of our steelworkers, and unleashes investment in a key American industry. Under the proposed framework, U. S. Steel would receive billions of dollars in investments over the next few years. This would include targeted investments to upgrade the Mon Valley Works and implement state-of-the-art technology. This would ensure Mon Valley continues to employ a strong workforce and can adapt to the modern-day demands of the changing steel industry.

This partnership with Nippon Steel would provide U. S. steelworkers with years of guaranteed job security and an up-front cash bonus. It would also likely support additional job creation in and around the facilities and communities that U. S. Steel calls home.

This deal would directly challenge China’s dominance of world steel markets. Six of the top-ten international steel manufacturers are in China. But the U.S. Steel–Nippon partnership would create the third largest steel manufacturer in the world. This new global partnership would elevate American steel to another level in a market saturated with Chinese steel.

The path for U. S. Steel to thrive leads to a partner who can invest in its plants, upgrade its technology, and reestablish it as a world-class contender. Nippon Steel is the only partner that comes anywhere near fitting the bill. Only Nippon has the deep pockets, advanced technology, and global standing to revitalize steelmaking in not only Pennsylvania but also the entire nation.

Nippon wants to invest in Pennsylvania. It isn’t asking for government subsidies. But Gov. Shapiro and state lawmakers should also take the occasion to tackle regulatory issues that have hindered steel production for decades. Shredding some of the notoriously red tape that stretches across our commonwealth would allow U.S. Steel and other manufacturers to create more high-paying jobs and grow the tax bases of local communities. 

The U. S. Steel-Nippon deal just makes sense. Japan and the United States already have strong economic ties, and many of Japan’s signature companies are well-liked and respected by Americans. Those companies, like Honda and Toyota, already invest in communities across the country and employ skilled American workers.

This new investment partnership for U.S. Steel is the right fit for steelworkers, Western Pennsylvania, and the United States. We urge the Trump administration to take the win. 

Nathan Benefield is the Chief Policy Officer of the Commonwealth Foundation, Pennsylvania’s free-market think tank.