Today for the Washington Monthly I argued that Joe Biden should abandon his opposition to Japanese-owned Nippon Steel taking over U.S. Steel.
As I explain in the article, in recent weeks the higher-minded arguments against the deal have largely been rendered moot. All that remains is short-sighted nationalism that would deprive America, and American workers, of billions in foreign investment.
Meanwhile, Donald Trump is continuing his arguments from the campaign in favor of protectionist, regressive tariffs.
On New Year’s Day, Trump shared on his social media site a post from the tech billionaire Marc Andreessen who marveled at a chart showing tariff revenue as a share of total federal revenue, which was very high before 1913 when the constitutional amendment empowering Congress to enact income taxes was ratified.
Andreessen said the “Second Industrial Revolution, perhaps the most fertile area for technology development and deployment in human history, was 1870-1914,” implying that tariffs deserved the credit.
Trump chimed in, “The Tariffs, and Tariffs alone, created this vast wealth for our Country. Then we switched over to Income Tax. We were never so wealthy as during this period. Tariffs will pay off our debt and, MAKE AMERICA WEALTHY AGAIN!”
While it’s not the primary reason for Biden to approve the steel deal, Biden should take the opportunity to explain the foolishness of Trump’s crude economic nationalism, and warped view of history.
But first, here’s what’s leading the Washington Monthly website:
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The Democratic Panic in New York: Associate Editor Nate Weisberg assesses why Democrats struggled in the normally deep blue Empire State last November. Click here for the full story.
We’re Losing the War Against Drunk Driving. Here’s How to Fight Back: Candace Lightner, founder and president of We Save Lives, urges a cultural shift regarding driving while under the influence. Click here for the full story.
Biden Should Approve the Nippon Steel Deal: My case in support of the needlessly controversial sale. Click here for the full story.
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Trump may be a crude nationalist, but Biden is not a crude promoter of globalization. As Rana Foroohar explained for the Monthly back in October 2023, Biden took “commerce back to an earlier era in which it was broadly understood that trade needed to serve domestic interests before those of international markets.”
But while Biden strategically jousted with China on trade, and prioritized investment into American manufacturing and infrastructure, he didn’t demean American allies, undermine NATO, or claimed that across-the-board tariffs on imports wouldn’t jack up prices on American consumers.
Trump, meanwhile, continues his bizarre quest to rewrite the history of the late 19th century Gilded Age. As I wrote three months ago, Trump’s narrative of a nation made wealthy by tariffs and ruined by the income tax skips over the crushing poverty:
…while in the 1880s and 1890s funding the government with tariffs was mathematically possible, it worsened the yawning wealth gap between the monopolistic “Robber Barons” like J.P Morgan and John D. Rockefeller and the millions who toiled in brutal unregulated factories or scraped by on family farms.
And in the mid-1890s–when the nation suffered a four-year economic collapse known contemporaneously as the “Great Depression,” with unemployment estimated to have peaked around 20 percent–the political movement for replacing high tariffs with a progressive income tax began.
Opposition to the Nippon Steel deal is based on little more than xenophobia. It promotes the fiction that the American economy does not need foreign investment and will only grow if we build more economic walls.
Biden should not only approve the deal, he should take direct aim at Trump’s nationalistic nonsense, and warn that he’s about to drag American down into the abyss of protectionism.
Best,
Bill
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