The hidden costs of Biden’s steel protectionism

Ever sinceUS US news broke in December of the acquisition of Steel, an iconic industrial firm, by Nippon Steel, a Japanese competitor, opponents have lined up to condemn the deal. On March 14th Joe Biden joined the chorus, saying that it was “vital” for the business to be domestically owned. “I told our steelworkers I have their backs,” he said, “and I meant it.” Others, including trade unions, see American ownership as the best way to preserve local jobs and investment. Free-traders rightly dispute such claims, but even they might accept an economically unsound idea for political reasons. If blocking the deal helps Mr Biden win crucial swing states and thus keeps Donald Trump from returning to the White House, surely that would be better for America and the world?Consider the stakes. Mr Trump has strongly hinted that he would abandon Ukraine to its Russian invaders, betraying a democracy and undermining the security of the West. He refused to accept electoral defeat in 2020, and has threatened “retribution” against his enemies at home. He is also much more protectionist than Mr Biden. He ruled out the Nippon deal in January, and has proposed a 10% blanket tariff on all imports. Mr Biden’s policy will probably win him votes in close races in Pennsylvania, where Steel is based, or in Michigan, where he campaigned on the day he denounced the deal. It could even be the difference between victory and defeat.