Â鶹ÒùÔº

US steel needs federal investment to stay competitive, expert says

If Tokyo-based Nippon Steel's proposed $14.1 billion purchase of U.S. Steel doesn't go through, the U.S. government should support the domestic steel industry the way it supports the development of semiconductors, a Northeastern University supply chain expert says.

Since President Joe Biden blocked the purchase last week, citing national security concerns, now is the time to modernize domestic steel production to meet U.S. demand, says Muhammad Noor E Alam, a Northeastern associate professor of mechanical and industrial engineering.

Both Nippon Steel and Pittsburgh-based U.S. Steel have sued the administration over the decision, so the final outcome is far from certain. However, Alam says, it's understandable that the U.S. government would not want the sale to go through.

"No one wants to give their critical infrastructure development resources to be controlled by a foreign country," he says.

Yet, Nippon's offer would have brought advanced technologies and modern infrastructure to U.S. Steel's out-of-date manufacturing system, Alam adds.

"The current U.S. manufacturing infrastructure and engineering capabilities are not very advanced," he says. "Technological advances that other countries have achieved are not being fully utilized in the U.S."

U.S. Steel ranks lowest among domestic producers, operating at . About used in the U.S. in 2023 was imported, according to Census Bureau data.

Being acquired by Nippon Steel would help upgrade U.S. Steel's infrastructure, Alam says, but it wouldn't address the wide gap between American and foreign steel production. A solution, he says, would be to analyze this gap and address it to reduce reliance on foreign steel.

A task force of industry experts should study best practices in steel manufacturing, Alam says, including environmentally sustainable approaches, steel recycling and the use of advanced technologies like AI and machine learning to make steel production more efficient and competitive.

Federal investments are also needed, Alam says, similar to the 2023 CHIPS and Science Act, which allocated $36 billion in semiconductor manufacturing and job creation.

Biden argues that steel manufacturing is critical to the U.S. economy and should not be controlled by foreign governments due to security concerns. Therefore, federal investments to achieve self-sufficiency in steel production are justified, Alam says.

"We have everything right here," he says. "But it is only possible by investing not just money but our brains."