Deal making runs into presidential politics

President Biden holds talks on Wednesday for Fumio Kishida, Japan’s prime minister, part of a state visit designed to show the US’s commitment to a staunch ally. Despite the pomp and ceremony, the presidential election will loom over the meetings, with Biden’s opposition to Nippon Steel’s bid for US Steel showing how the chase for votes is affecting deal making and economic policy.

Biden views relations with Japan as crucial. The summit will be just the fifth state visit of his administration, and reflects a different approach to that of his predecessor, Donald Trump. Both have been tough on China, but Biden has built alliances to hammer home the point. The president has cultivated relationships with Japan and South Korea (neighbors and big trading partners with China) and India (a regional rival), as well as Europe.

Biden is balancing that with swing-state politics. The president has campaigned in Philadelphia more than any other place during his presidency. It’s not quite US Steel country, and some Democrats are urging him to visit other parts of the state where Nippon Steel’s $14 billion bid for the Pittsburgh-based company is deeply unpopular.

The president needs to win over blue-collar voters to win Pennsylvania. Both Biden and Trump have courted union workers, notably during the auto industry strike last year. Biden is the first sitting president to visit a picket line.

Trade policy is key to such efforts. Trump ran in 2016 on an “America first” message. Slapping trade barriers on China was a key part of his argument that he would boost manufacturing at home. Trump has promised more wide-ranging tariffs if re-elected.

Biden has continued many of the same policies and is trying to avoid being outflanked by Trump.

The steel deal has run into that political reality. Nippon Steel thought its offer for US Steel would be straightforwardbut the United Steelworkers union pushed back. Biden came out against the dealciting national security concerns. “I told our steel workers I have their backs, and I meant it,” he said. The union has endorsed Biden.