Editors at National Review Online explain why President-elect Donald Trump should avoid government involvement in a high-profile free-market transaction.
About a year ago, we wrote an editorial about the acquisition of an antiquated mid-cap corporation by another firm. This sort of thing happens all the time, and we don’t normally editorialize on such deals. Bipartisan groups of senators don’t usually care about such deals either, but in this case, one did, so we wrote to defend the rights of shareholders against their meddling.
The senators were objecting to the sale of U.S. Steel to Nippon Steel, the Japan-based firm that is the fourth-largest steel producer in the world. The bipartisanship of some politicians’ resistance has continued since then. President Joe Biden, Vice President Kamala Harris, President-elect Donald Trump and Vice President-elect JD Vance (one of those senators) have all announced their opposition to the acquisition, as though they hold the right to approve such a transaction.
They do not. U.S. Steel is not owned by the U.S. government, and Nippon Steel is not owned by the Japanese government. These are both publicly traded companies owned by their shareholders, who approved the acquisition after a bidding process took place. This result ought not be a concern for the federal government, or for conservative magazines.Yet the federal government has made it one, so we will comment again. Trump said on Monday that he “will block this deal from happening” when he assumes office and instead will use “a series of Tax Incentives and Tariffs” to “make U.S. Steel Strong and Great Again, and it will happen FAST!”
Elon Musk and Vivek Ramaswamy are looking for ways to enhance “government efficiency.” Blocking a multibillion-dollar investment from a company based in an allied country and replacing it with a Rube Goldberg machine of tax incentives and tariffs doesn’t seem very efficient.
