Economic Nationalism

J.D. Vance Thinks U.S. Steel's Shareholders Weren't Adequately Warned of J.D. Vance's Efforts To Block Sale

Vance's latest gambit is pretty nonsensical, intellectually embarrassing, and obviously self-serving. But that doesn't mean that it's not dangerous too.


Shortly after Nippon Steel announced plans to purchase U.S. Steel, Sen. J.D. Vance (R–Ohio) vowed to "do everything in my power" to prevent the two private companies from finishing the deal.

Even against that backdrop, Vance's latest gambit is a shocking and shameless attempt at using federal power to steer U.S. Steel's shareholders away from the deal.

In a letter to the Securities and Exchange Commission (SEC), Vance argues that U.S. Steel's shareholders have been inadequately informed about what he calls "considerable—perhaps even insurmountable—obstacles to regulatory approval" of the Nippon deal. In light of those potential difficulties, Vance is asking the SEC to review the information that U.S. Steel provided to its shareholders, who are set to meet on April 12 to approve the deal.

On its face, this is pretty rich. As Dominic Pino points out at National Review, Vance has been pushing for many of those "considerable" federal regulatory obstacles that he's now fretting about. And Vance's ultimate goal seems to be getting Ohio-based Cleveland-Cliffs another shot at purchasing U.S. Steel, even though Japan-based Nippon offered a better price. In effect, Vance is now "seeking to ensure U.S. Steel shareholders get a worse deal" while simultaneously acting like he's defending the interests of those same shareholders, Pino writes. It's embarrassing, frankly.

But the implications are also quite chilling. Vance's letter suggests that a private company should face SEC scrutiny because its shareholders were not adequately scared of the government's ability to block that company from doing a deal. To put it another way: If your shareholders aren't scared into inaction by the threat of federal intervention in a private business deal, the very fact that they weren't scared into inaction can be used to bring about more federal intervention into that private business deal.

If all that is true, then where are the limits of federal power? Vance is positing a situation in which the government must grant implicit or explicit approval of every merger and acquisition involving an American company. It is a theory of federal power over the economy that might make Sen. Elizabeth Warren (D–Mass.) or Federal Trade Commission Chair Lina Khan blush.

Less theoretically, the U.S. Steel deal is starting to look like the first practical test of an idea that has been gaining steam in recent years on the nationalist right. Rather than trying to dismantle or at least curtail the regulatory state, some on the New Right believe that conservatives ought to wield those powers in much the same way as progressives and liberals have—but direct the efforts toward slightly different ends.

In this case, it's not clear if the ends are actually all that different. Vance's allies in the fight to stop the U.S. Steel/Nippon deal include Sen. Sherrod Brown (D–Ohio) and the United Steelworkers union. Rather than using the regulatory state for conservative ends, it looks like Vance is simply lending his support to the sort of protectionist racket that Republicans have traditionally, and correctly, opposed.

Vance has been open about his willingness to discard those traditionally conservative views, as Reason's Stephanie Slade has documented. He's suggested that conservatives should believe "there is no meaningful distinction between the public and the private sector" and has argued for using the power of the state to target groups like the Ford Foundation simply because they support causes with which he disagrees.

With the U.S. Steel/Nippon deal, we're seeing that idea being put into action. Vance's latest gambit involving the SEC is pretty nonsensical, intellectually embarrassing, and obviously self-serving. But that doesn't mean that it's not dangerous too.