In Chapter 4 of Hillbilly Elegy, the Rust Belt memoir that launched his political career, Sen. J.D. Vance (R–Ohio) relates a story about the time that Kawasaki bought out Armco, the steel-making company that once employed Vance's "Papaw."
Kawasaki is, of course, based in Japan. At first, Papaw and the other residents of Middletown, Ohio—described by Vance as "a town full of World War II vets and their families—react to the news as if "General [Hideki] Tojo himself had decided to set up shop in southwest Ohio." Once the initial fervor dies down, however, Papaw and the rest of the Middletown community recognize that the foreign company's investment in their local community can be a good thing. "The Japanese are our friends now," Papaw tells Vance.
"The Kawasaki merger represented an inconvenient truth: Manufacturing in America was a tough business in the post-globalization world," Vance writes. "If companies like Armco were going to survive, they would have to retool. Kawasaki gave Armco a chance, and Middletown's flagship company probably would not have survived without it."
There's another lesson that a reader might draw from Papaw's reaction to the Kawasaki takeover as well: It doesn't make much sense to apply geopolitical thinking to the world of business. Yes, the Japanese are "our friends now," but there's also a world of difference between an imperial war machine and a multinational corporation that wants to pay you wages for work.
On Monday, another Japan-based company, Nippon Steel, announced that it would be purchasing another struggling American steelmaking company, U.S. Steel, in a deal reportedly worth $14.1 billion.
Upon hearing the news, Vance did not exactly follow his Papaw's example. "Today, a critical piece of America's defense industrial base was auctioned off to foreigners for cash," thundered Vance in an official statement. "Rest assured that I will interrogate the long-term implications for the American people, and I will do everything in my power to protect the future of our nation's security, industry, and workers."
It seems that Vance has forgotten that the Japanese are our friends now, not shady "foreigners" invading crucial American industries. Perhaps he's also unaware that Nippon Steel has operated in the United States for 40 years, and that the company already owns two smaller American-based steelmakers: Standard Steel and Wheeling Nippon Steel, according to Reuters.
Maybe he can pick up a copy of Hillbilly Elegy and learn that other lesson too. There's absolutely no reason to apply silly geopolitical thinking to this transaction, especially when both U.S. Steel and Nippon Steel are publicly traded companies. One has a headquarters in the United States and the other has a headquarters in Japan, yes, but the truth is that both companies are owned by their shareholders—and literally anyone in the world can buy shares in either.
(Cynically, one might note that the Nippon deal means U.S. Steel won't be sold to Cleveland-Cliffs, another major steelmaker that had been aiming to acquire its rival. Cleveland-Cliffs, of course, is headquartered in Vance's home state of Ohio.)
Vance's reaction to the U.S. Steel announcement did serve one productive purpose, however. It is yet another illustration of how the populist right is merely recycling the flawed economic policy ideas of the far left.
For example, here's how progressive Sen. John Fetterman (D–Penn.) reacted to the news: "It's absolutely outrageous that [U.S. Steel] have sold themselves to a foreign nation," Fetterman said in a video recorded, somewhat bizarrely, on the roof of his house. "I am committed to doing anything I can do, from using my platform or my position, in order to block this."
If those statements were swapped, would you be able to tell the difference? Fetterman and Vance engage in the exact same set of fallacies, using almost exactly the same words to engage in some light xenophobia and some promises of heavy-handed government action.
Unsurprisingly, prominent figures of the so-called "New Right" jumped to praise Fetterman. "I'm starting to like this guy a lot," Compact magazine founder Sohrab Ahmari posted on X (formerly Twitter), referencing Fetterman's video statement.
This is all quite silly. America's interests are not served by having two supposedly rival political movements committed to seeing foreign investment as a threat to the country's sovereignty or American workers.
The good news is that the people on the ground—the Papaws of this story—seem to get it. "Don Furko, president of a union local in Clairton, Pa., said he was hopeful that new owners will add more workers in the region," The Wall Street Journal reported Monday. Meanwhile, both "U.S. Steel and Nippon Steel said they would honor existing contracts with union-represented workers, and that the companies agreed on the importance of investing in employees," the Journal added.
Nippon Steel is not personally owned and controlled by the ghost of General Tojo. It's a successful, publicly traded corporation with a long history of paying Americans wages for work. There's nothing sinister about this. Conservatives, especially, should understand the inevitable problems that result from mixing up geopolitics and businesses, as it only creates more opportunities for the government to stick its nose where it doesn't belong.
Maybe Vance needs another lesson from his Papaw.
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