It is no accident that the U.S. is a world leader in innovation. A major reason we hold this advantage over other nations and the European Union is due to many countries following the European model, which leans so heavily into regulation. But when it comes to the proposed merger between U.S. Steel and Nippon Steel, the Biden administration makes EU regulators look like libertarians.
European regulators consider it their job to fight corporate mergers. At times this has resulted in lower prices for consumers, which almost always accompanies less corporate investment and the production of lower quality goods and services.
Generally, U.S. antitrust regulators act in response to evidence of consumer harm, while EU regulators are willing to block mergers to prevent purely speculative harm — regardless of whether harm ever materializes.
America’s distaste for heavy-handed antitrust regulations helps explain why the U.S. leads the way in fields like A.I. and has experienced GDP growth during periods when Europe has lagged in both technological progress and economic growth.
It is quite eye opening, then, to learn the EU recently approved Nippon Steel’s acquisition of U.S. Steel while Washington bureaucrats are burying the deal in a mountain of red tape. It’s a sad situation when the EU’s famously difficult regulators swiftly recognize the enormous benefits of the proposed steel merger while the U.S. bottles up billions of dollars in critical investment to boost innovation in domestic steel production in a regulatory neverland.
Electoral and special interest politics are apparently at work in causing this role reversal. U.S. Steel and its employees’ union, the United Steelworkers, are both based in Pennsylvania, a must-win state for the Biden campaign. Since the union has aligned with its corporate partner Cleveland-Cliffs in opposition to the deal, President Biden has broken with precedent to place his finger on the scale against the acquisition.
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