President Biden and former President Trump — the two presumptive nominees to face off in the 2024 US presidential election — may be in agreement on their opposition to Nippon Steel's (NPSCY, 5401.T) acquisition of US Steel (X).
Yahoo Finance Senior Columnist Rick Newman reports on the likelihood of the deal while facing presidential opposition, also commenting on a Quinnipiac University poll forecasts Trump controlling a slight lead against Biden in the state of Michigan.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
JOSH LIPTON: Cleveland-Cliffs CEO reportedly considering now another bid for US Steel, but at a lower price versus the existing offer from Nippon Steel. This is according to Bloomberg. Shares of US Steel sliding for a second day as President Biden voicing opposition to that planned sale to Japan's Nippon Steel. While Donald Trump recently promised to block the takeover instantaneously if he wins the presidential race in November.
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Biden and Trump's stance on the proposed deal coming as the two candidates faced the heat of election year politics. Here to discuss now all this is Yahoo Finance's very own Rick Newman. So Rick, give us the Rick Newman take on all this.
RICK NEWMAN: Steelworker jobs and union jobs, I think, are the main issue here. I mean US Steel is not the titan it once was nor is the US Steel making industry. But guess what? It operates in Pennsylvania where it's headquartered in my hometown of Pittsburgh, by the way, where the Steelers remain named after the steel industry.
And there may not be a lot of steelworker jobs left in Pennsylvania, but there are enough for President Biden to care about it. Because, of course, Pennsylvania is a swing state. So he basically scotched the idea that the Japanese company Nippon Steel can buy US Steel this year. But he has not solved the problem, which is US Steel has just gotten too small and not profitable enough. And shareholders have been forcing some kind of action, such as a sale or some kind of consolidation.
So I'm not sure that Cleveland-Cliffs coming in with basically saying we'll buy this at a bargain basement price. I mean that's their first offer. I'm sure they'll probably go higher. But I'm not sure that solves the problem because part of the problem here is these big steel mills, these big, really costly steel mills are just outdated and cost inefficient. And the new model is the smaller mills that you find in the South, including some right to work states where the workers are not unionized. That's what everybody in this industry wants.
So what do you do about the big mills in the South? I mean, if Cleveland-Cliffs or any domestic company where to buy US Steel but not for enough money to continue operating those big mills, you would see workers losing their jobs anyway. So we're seeing this process play out, but I think there's a lot more to come here.
And I wouldn't rule out that Nippon Steel could still end up with US Steel. I just don't think it's going to happen before the 2024 election. But it does seem plausible that the election is over, Nippon Steel does provide guarantees to support some of those union or all of them probably. They'd have to do union jobs and maybe that would allow this to go through. But it's just too touchy to happen in an election season.
JULIE HYMAN: Well, and it's also interesting because not only are the politics domestically play a role. But the politics with Japan-- I almost said China because I was going to say China, obviously, there's tension there. Japan, things are good. So in other words, does this create a problem where none existed?
RICK NEWMAN: The problem is we're losing union jobs. I mean that is the problem. And I think in the heartland, it matters a lot less who the purchaser would be. What matters is these good-paying blue collar jobs have been going away. There's no secret about that. And I think any politician would be crazy to dismiss the fact that Trump won in 2016 because one reason he won anyway was he appealed to those blue collar workers in Midwestern states who feel like their way of life has been eroding and nobody has been doing anything about it.
So there is no way Biden is going to give an edge to Trump on that in 2024, especially since Biden, he carries himself-- he describes himself as the most pro-union president in American history. So this is about getting blue collar votes and persuading those people, especially in swing states that somebody in Washington is watching out for them and does have their back. I don't think it matters where the foreign purchaser would be. It could be the UK. It could be Canada, our neighbor to the North. I don't think it would matter.
JULIE HYMAN: So speaking of the election, there are some new Quinnipiac numbers out today. And in particular, they look at Michigan, which is another state that's going to be key in the race. And it looks like there that, I don't know, well, I'm seeing this number here that Donald Trump has more support. Although I'm seeing in the text that also Biden does have some support there. So it depends on what the race looks like, I guess.
RICK NEWMAN: Yeah and we're going to have tons of little data points like this during the next seven months. Quinnipiac actually describes that as a head-to-head outcome because the three-point margin that Donald Trump has is within their margin for error. We're going to keep talking about this.
I mean the thing to look for in Michigan, blue collar state. Biden did go there and he stood on a picket line with the United Auto Workers last year, again, trying to show some solidarity with union workers. But there's also a heavier Arab-American presence in Michigan than in most other states.
And that's the state where some of those voters, they put down the famous uncommitted when they went to the Democratic primary a few weeks back just to signal their displeasure with Biden a little too staunchly behind Israel, they are saying, and not standing enough behind the Palestinians. So that is a factor. I mean, many, many things to navigate here for Biden given wars overseas and difficulties in the US economy. So I guess if I were Biden, I would interpret that poll as definitely more work to do in Michigan.
JULIE HYMAN: All right, well, we'll keep in touch with you as we get all those other little data points you were referring to.