In the aftermath of World War II, America rebuilt the nation of Japan.
This was not an altruistic gesture or guilt for dropping the atomic bombs, but rather raw geopolitical calculus, with U.S. policymakers seeing a revitalized Japan as a defense against the spread of communism.
Through this effort, not only did America impede communist expansion in Asia but converted its wartime adversary into a staunch ally, a relationship that continues today.
And just as the Japanese helped combat the Soviet Union in the Cold War, they are likewise helping America combat China in the new one.
It is through this lens that Japanese company Nippon Steel's proposed merger with U.S. Steel should be considered.
Certainly, Americans may reflexively recoil at such an iconic American company as U.S. Steel, once synonymous with the nation's industrial power, falling into the hands of a foreign enterprise, even if an ally.
But if done correctly, this merger can be very much in the United States' national security and economic interests.
Indeed, just as Taiwan is assisting America to rebuild its semiconductor industry, Japan can do the same for our country in steel.
And by doing so, Japan can repay America's favor after WWII by helping to revive U.S. manufacturing.
For while the U.S. was not destroyed by a military conflict like Japan in WWII, our nation's manufacturing was decimated by a different sort of war, one waged against it for decades by globalist free traders, and the effects are comparable.
Steel production is essential to restoring America's manufacturing; but, unfortunately, U.S. Steel, like the American steel industry generally, is a far cry from what it once was or where it needs to be.
By contrast, Japan protected and strengthened its own steel industry, ironically, by copying industrial policies developed by America and practiced to great success for much of U.S. history, before foolishly being abandoned in favor of unfettered free trade and neoliberalism.
To rebuild its manufacturing base, America must return to the economic nationalism that made it so strong and prosperous, and the steel tariffs enacted under the Trump administration move in that direction.
Economic nationalism does not mean the U.S. rejects all foreign investment, but instead that it must come on terms beneficial to the nation and its workers.
The U.S. market is vast, and countries and companies around the world desperately want to access it. Though for too long it has been given away for a song.
Going forward, America must use its substantial leverage to drive hard bargains that ensure foreign investment, especially in critical industries, and advance U.S. national interests and, importantly, the prosperity of American workers, who for too long were sacrificed upon the free trade altar.
Nippon's merger with U.S. Steel can potentially serve as a model in this regard.
In fact, it is the tariffs and America's return to more protectionist industrial policies prompting Nippon to merge with U.S. Steel and to offer a large premium at that, as The Wall Street Journal pointed out; and other Asian steelmakers are likewise eyeing the U.S. market for this reason as well.
Simply put, Nippon wants in on the action of rebuilding America and is pledging to invest at least $1.4 billion in U.S. Steel facilities over the next three years and infuse them with advanced technology.
Nippon's CEO has also "committed to no layoffs, no plant closures, no shift of jobs or production outside the United States."
This resembles what occurred in the 1980s when President Ronald Reagan enacted trade barriers and import restrictions in the auto sector, forcing Japanese carmakers to invest heavily in U.S. automotive production.
Japanese carmakers were then incentivized to protect those investments and expand them further. They currently employ thousands of U.S. autoworkers, and Japan is now America's largest source of foreign investment.
The same is likely be the case with Japan's investment in America's steel industry.
Still, some cast doubt on the veracity of Nippon's promises.
This sentiment is understandable, given that even quintessential American companies have proven untrustworthy, with John Deere, for example, recently announcing it was laying off hundreds of U.S. workers and shipping production to Mexico.
And while Nippon has stated that it is willing to do whatever necessary to satisfy U.S. requirements and allay any doubts, America can and should use its leverage over Japan, which relies heavily upon U.S. protection, to ensure the company honors its promises.
Or as Ronald Reagan said, trust but verify.
It is also in Japan's own national security interests for America to possess a strong steel industry, which is critical to the strength of the U.S. defense industrial base, to combat China.
And neither America nor Japan can afford to allow their mutual adversary to dominate global steel production. However, our greatest enemy has, in fact, dominated the global steel market, with the world's largest steelmakers now Chinese companies.
The Nippon-U.S. Steel merger would create the world's second-largest steelmaker and one able to effectively compete and win globally against these Chinese steel behemoths.
Finally, for the sake of U.S. consumers, there must be adequate competition in their domestic steel market.
In this respect, the merger with Nippon is imperative, as America's other steelmakers — including the largest, Cleveland Cliffs, which just announced its own acquisition of a Canadian steel company — are enlarging themselves.
In sum, this merger can be a great deal for America and help make U.S. Steel strong again.
Lee Steinhauer is a strategic policy and political consultant known for his book "The Art of The New Cold War: America vs. China. What America Must Do to Win." Lee is a frequent guest on Fox, Fox Business, Newsmax, and a published policy and opinion writer for numerous media publications. Read Lee Steinhauer's Reports — More Here.
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