Biden opposes Nippon Steel takeover of US Steel

A view of the US Steel Edgar Thomson Works on January 21, 2020, in North Braddock, Pennsylvania. President Joe Biden said March 14, 2024 he is against the proposed sale of US Steel to Japan’s Nippon Steel, as election year considerations appeared to outweigh the risk of angering key ally Japan. — AFP pic

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Thursday, 14 Mar 2024 11:38 PM MYT

WASHINGTON, March 14 — President Joe Biden said today he is against the proposed sale of US Steel to Japan’s Nippon Steel, as election year considerations appeared to outweigh the risk of angering key ally Japan.

Biden’s intervention in the planned US$14.1 billion acquisition comes less than a month before he hosts Japan’s Prime Minister Fumio Kishida for a state visit to the White House aimed at boosting ties and countering China.

But Biden’s eye is apparently on November’s US presidential election against Donald Trump, with lawmakers from both sides having joined unions in opposing the sale of a American manufacturing icon to a foreign owner.

“It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it,” Biden said in a statement.

“US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

But Biden did not explicitly say he would block the deal, which has been under a US federal review of how it affects national security interests since it was announced in December.

US Steel shares were down 5.3 per cent in pre-market trading following the Biden statement.

In a joint statement, Nippon Steel and US Steel said they believed the deal should still go through, saying it reflected the “close alliance between Japan and the United States”.

“We welcome the administration’s scrutiny of the transaction, as an objective and comprehensive review of this transaction will demonstrate that it strengthens US jobs, competition, and economic and national security,” they said.

“We will continue to advocate for this deal, and we are confident that fair and thoughtful evaluation will result in its approval.”

‘Horrible’

But the proposed sale has become an election-year football in the United States.

US Steel is based in Pittsburgh in the key battleground state of Pennsylvania, which Biden won in the 2020 election and will fight with Trump for again in November.

Trump said in February that he would block the “horrible” deal if he wins a second term in the White House.

“I would block it instantaneously. Absolutely,” he said.

It also goes to the heart of Biden’s election manifesto pledge to rebuild American manufacturing, with concerns that a foreign takeover could send the wrong signal to the electorate.

Biden has been wooing US unions ahead of the election as he competes with Trump for vital working class voters.

Unions have reacted with fury to the proposed deal, despite the combined company’s vow to honor contract agreements between US Steel and the United Steelworkers (USW) union.

In December the USW ripped the proposed deal as reflective of a “greedy, shortsighted attitude” of US Steel, which dates to 1901, and questioned the ability of Nippon to honor contracts.

At the time the transaction also drew bipartisan howls on Capitol Hill, with Pennsylvania Democratic Senator John Fetterman calling the deal “absolutely outrageous.”

Trump-allied Ohio Senator JD Vance and two other Republicans asked Treasury Secretary Janet Yellen to block the deal, calling domestic steel production “vital to US national security.”

The White House said at the time that the deal should be closely investigated, warning that it could have national security implications.

The firms in December asked the Committee on Foreign Investment in the United States (CFIUS) — an interagency body established to review foreign takeovers of US firms — to evaluate the deal. — AFP

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