A wave of consolidation that has swept across American industry in recent years has left many wondering if such market movements are good for the country and the consumer.
Many believe that consolidation in the telecommunications industry, for example, has left Americans paying twice as much as Europeans for internet and cellphone service. An oligopoly of four companies that control about 80% of the beef and poultry market, meanwhile, has led to allegations of price-fixing and several multimillion-dollar settlements related to such claims.
Steel is an important component of countless consumer products, and as such, the potential pricing power of a colossal new steel producer could raise costs for consumers, adding to the already painful inflationary pressures American families face. Broader concerns for the federal deficit and the taxpayer should also be taken into consideration.
Such an acquisition could also lead to a reduction in jobs, including in my home state of Indiana. For example, if Cleveland Cliffs, a leading bidder for U.S. Steel, were to acquire the company, it would be the sole employer for the steel industry in the region around Gary, Indiana. Any acquisition would also likely have significant national security implications, as American steel is an important part of our defense industrial base. Though the identities of many of the companies interested in U.S. Steel remain unclear, reports have indicated that at least one foreign-owned steel conglomerate is among the bidders.