Nippon Steel Could Be a Shining Legacy for Donald Trump

Modern presidents have few opportunities for signature achievements to cement their legacies. But in the first 100 days of his second term, President Donald Trump has the opportunity to make one of the most important economic decisions of the decade by approving Nippon Steel’s purchase of U.S. Steel. 

America’s steel industry directly employs over 140,000 Americans and is used in so many products that it impacts over two million jobs in manufacturing, construction, and small businesses alike. Concerns about outsourcing a critical industry should not be taken lightly, and it’s no surprise that President Trump expressed serious reservations on the campaign trail of a Japan-based buyer acquiring such an iconic and crucial US company. 

At the same time, one of Trump’s prime solutions—tariffs—could cause even more pain for small businesses and consumers. I’m a free-market economist who doesn’t support the 25% steel import tariff he announced on Feb. 11. Small businesses with tight margins are already feeling the squeeze of inflation and lack the scale to absorb a drastic increase in the cost of raw materials without hiking customer prices.

Consumers will also notice the impact of the steel tariffs, particularly in industries like housing and groceries that use a lot of steel and have already been hit hard by inflation. Analysis by the Anderson Economic Group estimates new car prices could increase by as much as $12,000. All in all, the total cost of implementing all of the tariffs on which Trump campaigned could end up costing middle-class families an extra $1,700 a year.

But since entering office, Trump hasn’t just used tariffs as a bludgeon. Instead, his hard-nosed negotiating style created an opportunity to approve the deal and keep billions of dollars in annual domestic steel production safe from tariffs while hitting production conducted in other countries. This will keep thousands of jobs here at home, reduce inflationary pressures on consumers, and improve economic investments into struggling communities. 

Long before Trump took office, Nippon Steel offered nearly $15 billion for U.S. Steel, far exceeding what domestic steel companies had been able to bid. The company also promised a billion dollars toward updating U.S. Steel’s Mon Valley facility and $300 million for revamping furnaces at a Gary, Indiana plant. 

And those are just starting points for how the merger would benefit consumers, workers, and communities. Beyond just investment in infrastructure and technology, Nippon has also promised $5,000 per worker upon the close of the merger. This means that instead of potentially losing thousands of jobs in the Rust Belt, hard-working families will get short-term cash in their pockets and long-term job security. 

Approving the purchase is clearly in Trump’s political interest as well as the economic interest of millions of Americans. But there’s one more benefit that is often overlooked in the conversations—that Trump can have his cake and eat it, too, because approving the purchase could allow him to implement some of his tariffs at relatively low political and economic cost, with Nippon’s investments and promise to keep steel products domestic offsetting some of the costs associated with the proposed steel tariffs.

Over the course of two terms and three campaigns, Trump has balanced the economically libertarian, low-tax positions of the traditional Republican base with populist appeals for protective tariffs. Polling suggests small business owners were a significant part of the coalition that helped return Trump to the White House along with the blue-collar, middle-class voters he pulled from the Democrats.

The Nippon deal is Trump’s opportunity to show these constituencies that he heard them loud and clear. Billions in new investments, thousands of secure jobs, and reduced price challenges for consumers and small businesses are exactly the kind of lasting impact any president would love to achieve.

This article originally appeared in RealClearMarkets

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