McConnell in WSJ: Biden Sells Out American Workers, National Security to Big Labor

Washington, D.C.
–
U.S. Senator Mitch McConnell (R-KY)
penned an op-ed for The Wall Street Journal
today regarding the Biden Administration’s decision to block the Nippon Steel acquisition of U.S. Steel:
The Biden administration will leave America’s core economic and national-security interests less secure than it found them. By blocking what could have been a transformational investment in a critical U.S. industry weeks before his term ends, President Biden has saved some of the worst for last.
His intervention against the acquisition of U.S. Steel by Japan’s Nippon Steel subordinates America’s economic and security interests to the politics of organized labor. But in its public justification, his administration seems to expect us to believe the opposite—that, if not for Mr. Biden’s action, the proposed investment might threaten “to impair the national security of the United States.”
The American people, along with U.S. allies and trading partners, are waiting to see the “credible evidence” on which the administration says this claim rests.
The administration’s decision may cause American workers to wonder what’s wrong with foreign companies—especially those of close allies and partners—pouring money into the U.S. economy and creating jobs. Workers at Nippon Steel’s U.S. facilities may wonder which part of their livelihood is a national-security threat. In Alabama, Indiana, Kentucky, Pennsylvania, Tennessee, Texas, Washington and West Virginia, they make a living because America’s closest ally in the Indo-Pacific has bet big on U.S. workers.
In Georgetown, Ky., hundreds of skilled workers build automotive parts at a facility owned by Nippon Steel. About 5 miles away, another Japanese firm, Toyota, employs nearly 10,000 people full-time at the company’s largest vehicle-manufacturing plant in the world. Toyota recently announced more than $2 billion in new investments to expand and modernize its facilities there.
Japan likely wonders why the Biden administration considers a major investment in American jobs and manufacturing a national-security risk but not its purchase of cutting-edge American military technologies. Just last week, the State Department approved the sale of $3.64 billion in air-to-air missiles to further strengthen this crucial U.S. ally.
The language the administration used in scratching its protectionist itch wasn’t arbitrary. The Biden White House knows that federal statute demands that it at least pay lip service to a standard—“credible evidence” of threats to “impair” national security—enacted after extensive debate over trade legislation during the Reagan administration.
Even at the peak of public concern over Japanese investments in American industries during the 1980s, legislators understood that claims of impaired national security must meet a high bar to justify impeding free commerce. In 1985, even the Japanese acquisition of a firm that specialized in making ball bearings for the military was approved with reasonable requirements to maintain U.S. production.
In the 1988 debate over the Exon-Florio provision amending the Defense Production Act, the leading advocate for careful limits on the scope of presidential review of foreign direct investment was Treasury Secretary James Baker. Reports indicate that Mr. Biden’s closest national-security advisers urged him not to block Nippon Steel’s purchase of U.S. Steel. If only they’d done so sooner and more forcefully.
Mr. Biden is union bosses’ closest White House ally in generations. By exploiting the president’s worst impulses, protectionists have won a rare and potentially disastrous victory. Anyone seriously concerned about strengthening the alliances needed to outcompete predatory Chinese trade practices must hope the blockage is short-lived.
Foreign direct investment enriches American communities and deepens bonds with friends and partners abroad. In its report on economic competition with China, the House Select Committee on the Chinese Communist Party recommended that Congress add Japan to the “whitelist” of excepted foreign states for more effective use of the Committee on Foreign Investment in the U.S. against Chinese influence.
That recommendation apparently fell on deaf ears in the White House—and perhaps that shouldn’t come as a surprise. This isn’t the first time in the past four years that the administration put domestic political interests above U.S. geostrategic interests. Mr. Biden’s marquee domestic legislation, the inaptly named Inflation Reduction Act, picked a fight with America’s closest allies and partners when it should have aligned them more closely against Chinese economic predation.
Despite touting “friend-shoring” as a pillar of his approach to trade and economic competition, Mr. Biden rejected a deal with an even more appealing outcome: on-shore American jobs, a multibillion-dollar investment in modernizing U.S. Steel’s facilities and a chance to make steel production in America more competitive with China.
The departing administration chose the short-term whims of Big Labor over the long-term interests of American industry, workers and geopolitics.
President-elect Trump can call this blunder what it is and do the opposite. His administration should work with Indo-Pacific allies and encourage investment in America. The challenges posed by major adversaries are too great for the U.S. to go it alone.
Mr. McConnell, a Republican, is a U.S. senator from Kentucky.