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Democracy Unfiltered with C-SPAN. | |
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| Democracy Unfiltered. Democracy. | ||
| It isn't just an idea. | ||
| It's a process. | ||
| A process shaped by leaders elected to the highest offices and entrusted to a select few with guarding its basic principles. | ||
| It's where debates unfold, decisions are made, and the nation's course is charted. | ||
| Democracy in real time. | ||
| This is your government at work. | ||
| This is C-SPAN, giving you your democracy unfiltered. | ||
| Our next guest is Christine McDaniel. | ||
| She's a senior research fellow at George Mason University's Mercatus Center. | ||
| She served as the senior trade economist in the George Bush W. Bush administration at the White House from 2005 to 2007, here to talk about a pending decision concerning U.S. steel and protest and pushback from the Biden administration. | ||
| Ms. McDaniel, thanks for giving us your time. | ||
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unidentified
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Good morning. | |
| Thank you for having me. | ||
| For those who are maybe not following as close as you are on this story, explain what has happened in the last few days concerning U.S. steel. | ||
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unidentified
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Well, the last few days, on January 3rd, President Biden officially blocked the deal. | |
| The Japanese steelmaker Nipbon Steele had made an offer to acquire U.S. steel, and they were trying to work the deal out. | ||
| The Committee on Foreign Investment in the United States, it's called CPIS. | ||
| You'll hear a lot about that on this case, Cypheus. | ||
| The Treasury-led, it's an interagency group of people that make sure that large enough deals or deals that might give off a red flag are legit and credible and don't pose any national security risks. | ||
| So CFIAS did their investigation. | ||
| They couldn't come to a conclusive result. | ||
| So they kitchened up to the president, and President Biden blocked it. | ||
| So President Biden said that there was credible evidence that the Japanese steel maker might take action that threatens to impair the national security of the United States. | ||
| And that's where we are now. | ||
| Both sides have taken this to court. | ||
| People say it'll probably be held up in the courts for a while. | ||
| And then the next administration, the Trump administration, will likely play a key role in deciding how this ends up. | ||
| Why was Nippon Steel interested in U.S. steel? | ||
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unidentified
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Well, I mean, foreign mergers and acquisitions, cross-borders happen all the time. | |
| Somebody sees an opportunity and they propose a merge or acquisition. | ||
| In this case, it sounds like, at least what Nepal Steele said, that they saw an opportunity to invest in U.S. steel in terms of their competitive advantage was Integration into global value chains and arguably, | ||
| you know, superior firm-specific capital and technology and more advanced innovative production techniques. | ||
| They wanted to bring that to U.S. steel. | ||
| Plus, U.S. steel being inside the U.S., you know, they are protected from the tariffs, right? | ||
| So somewhat similar to remember in the Reagan years when Reagan started putting up all those barriers for imported automobiles. | ||
| And then what happened was, you know, Japanese automakers jumped over the tariffs and started making the stuff, making their cars in the U.S. Kind of same thing going on here. | ||
| You know, they see the U.S. getting more and more protectionist. | ||
| So they want to invest in the United States and be kind of protected themselves, not be harmed by those tariffs. | ||
| So it has the potential to be a win-win for the Japanese steel maker and the U.S. steelmaker and the workers, because with that huge capital injection, it could keep U.S. steel going. | ||
| When you say keep U.S. steel going, can you elaborate? | ||
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unidentified
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Well, you know, U.S. steel has been struggling on and off for decades now. | |
| The steel industry in general in the U.S. has been asking for protection from import competition for also for decades. | ||
| Sometimes it works, sometimes it doesn't. | ||
| Even if it works in the short term, eventually, you know, global economic realities catch up and they come back asking for more production. | ||
| In President Bush's administration, that happened. | ||
| And then a lot of anti-dumping counterbailing duties continued before and after that, special Bush safeguard case. | ||
| And then, of course, President Trump used a national security tool, Section 232, for more tariffs for steel. | ||
| And, you know, so there's just been this industry is one that just is constantly seeking protection from foreign import competition. | ||
| And, you know, whether that's right or wrong, you know, that's just the reality of the situation. | ||
| And it's U.S. is U.S. steel, for the most part, is not necessarily globally competitive. | ||
| There are components, parts of the sector that are fairly competitive globally. | ||
| But overall, U.S. steel prices do tend to be higher than global prices. | ||
| Christine McDaniel, for this conversation concerning this potential sale of U.S. steel to a Japanese company, if you want to ask her questions about it and the issues that she's talked about, 202748-8000 for Democrats, 202748-8001 for Republicans, and Independents 202748-8002. | ||
| You can text us your questions or comments at 202-748-8003. | ||
| Ms. McDaniels, here is the part of the statement from President Biden concerning his concerns about the sale, saying this: a strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. | ||
| That's because steel powers our country, our infrastructure, our auto industry, our defense industrial base. | ||
| As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America's largest steel producers under foreign control and create risk for our national security and critical supply chains. | ||
| So that is why I am taking action to block this deal. | ||
| That being said, has there been a specific given about what the national security concerns are? | ||
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unidentified
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Yeah, we haven't seen anything publicly given yet. | |
| No publicly available details on that so-called credible national security threat. | ||
| So they don't necessarily have to make it public, but maybe it's there, maybe it's not. | ||
| I don't know. | ||
| But so far, it hasn't been publicly detailed what that credible national security threat is. | ||
| And it was interesting, too, that the Committee on Foreign Investment in the United States is a committee of several agencies, Treasury, Pentagon, State, Commerce, et cetera. | ||
| And this time, there was some reportedly some, it wasn't unanimous consent among all the members. | ||
| And reportedly, Treasury State and the Pentagon all agreed that there was no national security threat. | ||
| So that's why it was kind of surprising that the White House did say there was a credible national security threat, when the Pentagon themselves say there isn't. | ||
| But that's all we know publicly. | ||
| Here's the response from the U.S. Steel's president's David Burrett. | ||
| He also serves as CEO. | ||
| He said this, President Biden's actions today is shameful and corrupt. | ||
| He gave a political payback to a union boss out of touch with his members while harming our company's future, our workers, and our national security. | ||
| He insulted Japan, a vital economic and national security ally, and put American competitiveness at risk. | ||
| The Chinese Communist Party leaders in Beijing are dancing in the streets, and Biden did it all while refusing to even meet with us to learn the facts. | ||
| Our employees and communities deserve better. | ||
| Ms. McDaniel, what do you think of that response? | ||
| What's interesting of that response to you? | ||
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unidentified
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Well, you know, both sides are going to be making their statements now. | |
| But look, I mean, you know, when this deal was first announced as an idea, was it last year? | ||
| My, you know, my gut reaction as an economist who's been studying this industry for a while was like, oh, you know, that could be a great opportunity. | ||
| Good for the workers, good for the company, good for the U.S. steel industry. | ||
| You know, we have a fresh injection of capital, fresh technology, you know, new innovative production processes. | ||
| Also, a really good, strong ties to such a strong steel maker in a very strong allied country like Japan. | ||
| And given, you know, notwithstanding any credible national security threat, you know, it should be up to the companies to decide what they want to do. | ||
| And if they think it's a win-win, you know, based on the market conditions, then it's a win-win. | ||
| So, you know, it's not surprising he's saying this. | ||
| There's also been some reports, you know, that there has been some extra lobbying on this case by the unions and then by another company called Cleveland Cliffs, which is another U.S. steel maker. | ||
| And so it sounds like that is being cited a lot in some of these court cases that are being filed. | ||
| So it'll be interesting to watch how this plays out. | ||
| That's the court side, Ms. McDaniel. | ||
| We have a new president coming in in just a matter of weeks. | ||
| What's the president-elect's take on this deal? | ||
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unidentified
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Well, so President Trump has said publicly that he does not like the idea of a foreign entity taking ownership of U.S. deal. | |
| But during campaign days, people say a lot of different things. | ||
| So we'll have to wait and see. | ||
| Also, President Trump is someone who really seems at core to respect the market. | ||
| I'm not wanting to disrupt the market. | ||
| So he's going to have a lot of competing interests here. | ||
| So far, he says that he's opposed the deal, but we'll see when he gets in and his team gets in, and maybe they'll have a fresh take on it. | ||
| We'll have a closer look at all the information, not just the information that they were privy to. | ||
| And who knows? | ||
| I don't think this is over yet. | ||
| In fact, what would change the situation on the ground? | ||
| Either, I suppose, a change of position by either this president or the next, but what other factors could change? | ||
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unidentified
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Well, I mean, to the extent there's a credible national security threat reported by Biden, perhaps the Trump team will have a different lens through which to view national security. | |
| What is seen as a national security threat to President Biden may not be seen as a national security threat to President Trump and his team. | ||
| So the criteria might be different for Trump and his team. | ||
| And we'll just have to wait and see. | ||
| Ms. McDaniel, was there a sense if this deal were to take place, how those employed by U.S. Steel would be affected? | ||
| Would those lose jobs? | ||
| Would they be able to keep their jobs? | ||
| Any sense of what would happen to the employees? | ||
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unidentified
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Well, yeah, that was what was so striking here. | |
| Peter, because the Nipbone Steel, in their proposal, committed to honoring all of the labor unions terms and conditions that they had already worked out. | ||
| So they weren't going to touch any of that. |