“Son offered a similar commitment after Trump’s first presidential win in 2016, when Son pledged a $50 billion investment and the creation of 50,000 new jobs. But while SoftBank does seem to have followed through on its investment promise, it’s “unclear” that the jobs followed — a reminder that splashy announcements like Son’s latest should not necessarily be taken as iron-clad guarantees.
While CNN’s Allison Morrow and David Goldman found that SoftBank did invest roughly $75 billion in US companies after its first pledge, it “never made clear how many of those jobs it actually created — and how many were actually a result of a new investment,” they write.
Vox reached out to SoftBank for clarity on its previous investments and how many jobs they generated but did not receive a response prior to publication.
Other corporate investments that Trump touted in his first term had underwhelming returns as well. In the case of Foxconn, a Taiwanese manufacturer, for example, the company promised a $10 billion Wisconsin plant and 13,000 jobs, and fell short on both counts. An updated version of the deal eventually saw Foxconn reduce that figure to roughly 1,500 jobs.
According to a 2019 ProPublica investigation, multiple other corporations, including Alibaba and Broadcom, were also cited by the Trump administration as sources for new jobs, though many of these gains never materialized.
Such pledges, though, still have value to a president who once vowed to run the country like a business, regardless of their eventual success. They provide a good headline for Trump, and a chance to burnish his self-created image as a “dealmaker.”
Now that Trump is returning to power, business leaders are once more looking for ways to build influence with the administration, often with the goal of shaping favorable regulatory outcomes or government contracts. The SoftBank announcement suggests touting prominent job commitments, including those the company might not be able to deliver on, will continue to be one of those avenues.”
“In a newly-released research paper, Evan Cunningham, a Ph.D candidate in Economics at the University of Minnesota, studied the effects of Amazon’s continued spread across the country—growing from just a handful of warehouses, or “fulfillment centers,” in 2010, to more than 1,300 today in the U.S. alone. On balance, it turns out that Amazon warehouses provide a net positive to local economies.
“I find Amazon’s entry in a metro [area] increases the total employment rate by 1.0 percentage points and average wages by 0.7 percent,” Cunningham writes. “The composition of employment shifts from retail and wholesale trade to warehousing and tradeable services, primarily driven by younger workers. Employment gains are concentrated among non-college workers.”
There are also some drawbacks, though it largely depends on your perspective. “Amazon’s entry increases rents by 1.1 percent and the cost of utilities by 6.0 percent,” while “average home values increase by 5.6 percent.” Higher rents and utility rates may not sound particularly appealing, but Cunningham notes that this is a result of higher housing demand: “The average worker is willing to pay $329 per year to live in a large U.S. city after Amazon’s entry, relative to a counterfactual U.S. economy where Amazon did not expand. This increase was primarily driven by rising home values, implying the benefits accrued to home owners.””
“in the face of increasingly tough competition both domestic and foreign, US Steel started to look for a buyer. Late last year it found one in Nippon Steel, the largest steel manufacturer in Japan, which offered $14.9 billion for the company.
In many ways, it seemed like a natural fit. The world’s current leading steel producer, by a wide margin, is China, and just as a US-Japan alliance is the linchpin of efforts to contain China militarily, a US-Japan corporate merger could be a linchpin of efforts to contain China’s efforts to dominate the steel market. Letting a military rival control the production of such a crucial material (and such an important one for defense applications like warships and warplanes) comes with clear risks.
Except the deal now will not go through. President Joe Biden, who came out in opposition to the deal in March, announced on Friday he would block the sale on the grounds that the deal represented a threat to national security.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden said in a statement. “And it is a fulfillment of that responsibility to block foreign ownership of this vital American company.”
The decision comes after the Committee on Foreign Investment in the United States (CFIUS, an interagency council controlled by Biden’s Cabinet and other appointees) decided not to formally recommend whether the takeover should go forward, though it did express reservations about the deal in letters to Nippon Steel and US Steel. CFIUS has the power to vote mergers and acquisitions it deems dangerous to national security.
National security, though, is not necessarily the reason why Biden made the highly unusual decision to block the deal, even though US Steel is threatening to shut down multiple mills should the deal not go through, which could put thousands out of work. His administration’s diplomats had reportedly told Japanese officials they need to kill the merger so Democrats would win Pennsylvania last November. (Even though Kamala Harris also came out against the deal on the campaign trail, she still lost Pennsylvania by over 100,000 votes.) Donald Trump also signaled opposition to the acquisition.
Why did this deal become so unpopular? Some of it surely is the symbolism of “US Steel” being sold to “Nippon Steel,” which if included as a plot point in a late ’80s/early ’90s movie about the unstoppable economic rise of Japan, would come across as a little too on the nose. Unsurprisingly, Trump, whose form of nationalism has a distinct 1980s vintage, explained his opposition as motivated by a desire not to sell out to “Japan.”
But the bigger reason politicians lined up against the deal is that the leadership of the United Steelworkers union (USW), which includes most of US Steel’s workforce among its 60,000 steelmaking members, strongly opposed it, though many members dissented. Sen. John Fetterman (D-PA) candidly stated he’ll oppose the deal as long as the union does.”
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“One can hardly blame the United Steelworkers union for being skeptical of minimills, given how the spread of the business model has decimated its membership. The problem is not just that minimills require fewer workers, but that they tend to be located in southern, anti-union states, with non-union labor.
There are a total of eight operational integrated steel mills in the US, all owned by US Steel or Cleveland-Cliffs; three are in Indiana, two in Ohio, one in Michigan, and one in Pennsylvania. The eighth, in Granite City, Illinois, idled its blast furnaces indefinitely late last year, though it continues to roll and finish steel slabs produced elsewhere. All eight of these facilities are unionized, six by the United Steelworkers.
By comparison, there are 88 electric arc furnace facilities in the US. While it’s hard to know what share are unionized, most are not; only about 23 percent of iron and steelworkers in the US overall are covered by a union contract, down from over half in 1983. Given that almost all workers in integrated mills are covered, it’s reasonable to surmise that the large majority of minimill workers aren’t in a union, making steel a majority non-union industry overall.
There are always exceptions, like a US Steel electric arc furnace facility in Alabama where workers are USW members, but for the most part, big integrated mills mean union power, and minimills with electric arc furnaces mean union decline. Nucor, the largest steel company in the US with over 25 million tons sold last year to US Steel’s 15.5 million, both pioneered minimills and is famously non-union. Even US Steel, long a center of union strength, acquired an Arkansas non-union electric arc furnace mill in 2021.”
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“How did this tie into the Nippon Steel bid? Essentially, the steelworkers saw Nippon as threatening to move US Steel toward minimill-type production and away from the conventional blast furnace/basic oxygen furnace integrated mills where the union is strongest.”
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““The reality is that there are certain crucial products that simply cannot be made without blast furnaces, including those used in automotive, energy, and national security applications,” the union insisted. They have a point. We can’t run the world economy on recycled scrap metal alone, and advanced high-strength steel (AHSS), needed for car manufacturing among other uses, tends to be made with blast furnaces, not electric arc furnaces, in part because scrap of high enough quality to make AHSS is rare. EAFs running on iron produced through direct reduction, not blast furnaces, may be able to make inroads here, but right now we need blast furnaces for cars.
There are other union concerns as well. The acquisition was announced without giving the union prior notice, which it claims violates the collective bargaining agreement reached between the union and US Steel.
Moreover, the union had another buyer in mind: Cleveland Cliffs, the No. 2 steel company in the US and the only other operator of traditional integrated mills. The company committed to the union that no union member would lose their job upon acquisition, and would continue to operate blast furnaces. Once again, the USW position emphasizes keeping traditional mills, with large union workforces, going.
However, Cleveland Cliffs only offered $7.3 billion, about half of Nippon’s $14.9 billion, for US Steel. It reportedly offered much more than that privately in response to the Nippon bid, but even then it didn’t match the Nippon offer. A Cleveland Cliffs purchase would have also raised major antitrust issues that would presumably bother the unusually antitrust-focused Biden administration. The Alliance for Automotive Innovation, the US auto manufacturers’ lobby, wrote to policymakers to express concern over one firm controlling 100 percent of US blast furnaces, and 65 to 90 percent of the steel used in vehicle manufacturing.
Industry press coverage of Cliffs notes quite candidly their strategy of trying to dominate blast furnace production so they can charge a higher price. In other contexts, that’s a kind of monopoly-oriented strategy that Biden appointees like Federal Trade Commission chair Lina Khan or Department of Justice antitrust chief Jonathan Kanter would normally object to.”
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“Some environmental groups criticized the deal on the grounds that Nippon is committed to keeping high-emissions blast furnaces running — precisely the opposite conclusion of the steelworkers’ union. If the steelworkers were right, that probably would have been good news for Nippon and US Steel’s carbon footprint.
As it stands, electric arc furnaces are far cleaner than blast furnace/basic oxygen steel production.”
“In an ideal world, everyone who qualifies for an aid program ought to receive its benefits. But the reality is that this is often not the case. Before the pandemic, for example, nearly one-fifth of Americans who qualified for food stamps didn’t receive them. In fact, millions of Americans who are eligible for existing social welfare programs don’t receive all of the benefits they are entitled to.”
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“Means testing a given social program can have good intentions: Target spending toward the people who need it most. After all, if middle- or high-income people who can afford their groceries or rent get federal assistance in paying for those things, then wouldn’t there be less money to go around for the people who actually need it?
The answer isn’t so straightforward.”
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“Implementing strict eligibility requirements can be extremely tedious and have unintended consequences.
For starters, let’s look at one of the main reasons lawmakers advocate for means testing: saving taxpayers’ money. But that’s not always what happens. “Though they’re usually framed as ways of curbing government spending, means-tested benefits are often more expensive to provide, on average, than universal benefits, simply because of the administrative support needed to vet and process applicants,” my colleague Li Zhou wrote in 2021.
More than that, means testing reduces how effective antipoverty programs can be because a lot of people miss out on benefits. As Zhou points out, figuring out who qualifies for welfare takes a lot of work, both from the government and potential recipients who have to fill out onerous applications. The paperwork can be daunting and can discourage people from applying. It can also result in errors or delays that would easily be avoided if a program is universal.
There’s also the fact that creating an income threshold creates incentives for people to avoid advancing in their careers or take a higher-paying job. One woman I interviewed a few years ago, for example, told me that after she started a job as a medical assistant and lost access to benefits like food stamps, it became harder to make ends meet for her and her daughter. When lawmakers aggressively means test programs, people like her are often left behind, making it harder to transition out of poverty.
As a result, means testing can seriously limit a welfare program’s potential. According to a report by the Urban Institute, for example, the United States can reduce poverty by more than 30 percent just by ensuring that everyone who is eligible for an existing program receives its benefits. One way to do that is for lawmakers to make more welfare programs universal instead of means-tested.”
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“There sometimes is an aversion to universal programs because they’re viewed as unnecessarily expensive. But universal programs are often the better choice because of one very simple fact: They are generally much easier and less expensive to administer. Two examples of this are some of the most popular social programs in the country: Social Security and Medicare.
Universal programs might also create less division among taxpayers as to how their money ought to be spent. A lot of opposition to welfare programs comes from the fact that some people simply don’t want to pay for programs they don’t directly benefit from, so eliminating that as a factor can create more support for a given program.
In 2023, following a handful of other states, Minnesota implemented a universal school meal program where all students get free meals. This was in response to the problems that arise when means testing goes too far. Across the country, students in public school pay for their meals depending on their family’s income. But this system has stigmatized students who get a free meal. According to one study, 42 percent of eligible families reported that their kids are less likely to eat their school meal because of the stigma around it.
Minnesota’s program has proven popular so far: In September 2023, shortly after the program took off, the amount of school breakfasts and lunches served increased by 30 percent and 11 percent compared to the previous year, respectively.
While it might not be politically feasible — or, in some cases, necessary — to get rid of means testing for all public subsidies, free school meals also offer an example of what a compromise might look like at the national level. Though Congress hasn’t made school meals free to all, it passed a provision in 2010 that allows schools to provide free meals to all students in districts where at least 25 percent (originally 40 percent) are eligible. The program showed that providing free meals to all lowered food insecurity, even among poor students who already qualified for free meals, by removing stigma. (The community eligibility provision now serves nearly 20 million students.)
As for how universal programs can be paid for, the answer is, yes, imposing higher taxes. It might seem inefficient to give people a benefit if you’re going to essentially take it back from them in taxes, but what you actually end up with is a much more efficient program that is more easily administered and doesn’t leave anyone out.”
“the U.K. became the first new member to join the tongue-twisting Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) since it was formed in 2018.
It’s also the first country that doesn’t at least have a coast fronting the region.”
“The Committee on Foreign Investment in the United States (CFIUS) was unable to reach a consensus on Japan’s Nippon Steel’s $15 billion acquisition of U.S. Steel. The very committee that is responsible for safeguarding the U.S. from compromising foreign investments doesn’t recommend blocking the merger”
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“CFIUS’s inability to recommend blocking the merger on national security grounds is not surprising: Japan is not an enemy of the U.S., but a close ally. The U.S. has been formally allied with Japan since the signing of the U.S.-Japan Security Treaty in 1951. In April, Biden and former Japanese Prime Minister Fumio Kishida issued a joint statement celebrating “a new era” of bilateral security cooperation and announcing “several new strategic initiatives to strengthen our defense and security cooperation [and] bolster economic security.”
A section of the joint statement details the two countries’ commitment to economic cooperation under the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership, which the Biden administration announced in April 2021 to advance cooperation “on sensitive supply chains…and on the promotion and protection of critical technologies.” The statement also celebrates mutual investment, pointing to Microsoft’s $2.9 billion investment in AI and cloud infrastructure in Japan and Toyota’s $8 billion battery production investment in North Carolina—a mere 1 percent of Japan’s $800 billion in foreign direct investment in the U.S.
If mutual investment in critical industries like semiconductors and batteries doesn’t compromise national security, the burden of proof is on those opposing Japanese investment in American steel production to explain why it does. CFIUS could not meet this burden and refrained from issuing a recommendation accordingly.”
“When the TCJA passed, analysts projected that it would add to the budget deficit and national debt—and it did. But those problems were more easily waved away when the country was running significantly smaller annual deficits and the debt-to-GDP ratio wasn’t reaching levels unseen since the height of World War II.
A full extension of the TCJA would add another $4.6 trillion to the deficit over the next 10 years, the Congressional Budget Office projects.”
“America’s ports have fallen behind. Not a single one ranks in the top 50 worldwide.
A big reason is that dock unions stop innovation.
This fall, the International Longshoremen’s Association shut down East and Gulf coast ports, striking for a raise and a ban on automation. They got the raise.
Now union president Harold Daggett says longshoremen will strike again in January if they don’t get that ban on automation.
His statement in my new video makes it clear that he knows how badly his strike would damage other Americans.
“Guys who sell cars can’t sell cars, because the cars ain’t coming in off the ships. They get laid off,” says Daggett. “Construction workers get laid off because materials aren’t coming in. The steel’s not coming in. The lumber’s not coming in. They lose their job.”
Obviously, labor leaders aren’t necessarily “pro-worker,” says Mercatus Center economist Liya Palagashvili.
“They’re saying, ‘We don’t care if these other jobs are destroyed as long as we get what we want.'”
Daggett is unusually clueless. He doesn’t understand that a ban on automation will also hurt his members.
As Palagashvili puts it, “They’ll save some jobs today, but they’ll destroy a lot more jobs in the future.”
That’s because today’s shippers have options. Daggett’s union only controls East and Gulf coast ports. Shippers can deliver their products to ports that accept automation.
“We’re going to see less activity in ‘Stone Age’ ports,” says Palagashvili.
“Stone Age?”
“They want to ban automated opening and closing of port doors,” she points out, requiring workers to pull heavy doors themselves.”
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“”Some port jobs will definitely be lost,” she says, “but that’s not a bad thing. Look at it historically; we had hundreds of thousands of blacksmiths and candlemakers and watchmakers.”
Obviously, those and other jobs were destroyed by new technology. But unemployment didn’t surge. New jobs emerged—jobs people at the time didn’t imagine: programmers, mechanics, electricians, medical technicians.
That’s capitalism’s “creative destruction.” It constantly creates new jobs. That makes most everyone richer.”
“American consumers and businesses bore roughly 93 percent of the cost of Trump’s tariffs, according to one analysis by Moody’s. The U.S. Trade Commission concluded in 2023 that American companies and consumers “bore nearly the full cost” of the tariffs Trump levied on steel, aluminum, and many goods imported from China.”
Trade and new efficient technology work in similar ways. They both directly and noticeably eliminate certain jobs, but, produce more economic growth and jobs total.