President Joe Biden has voiced opposition to the proposed sale of a Pittsburgh-based steel manufacturer, US Steel, to Japan’s largest steel producer, Nippon Steel. Biden underscored the importance of maintaining “strong American steel companies powered by American steelworkers.”
Biden’s stance against the acquisition by Nippon Steel comes amid efforts to solidify support among unions and blue-collar workers in Pennsylvania, a critical swing state, ahead of the upcoming presidential election in November. Notably, Biden secured victory in Pennsylvania by a narrow margin in 2020, highlighting the state’s significance in national politics.
Former President Donald Trump also expressed disdain for the proposed sale earlier this year, characterizing it as “a horrible thing.” Biden reiterated his commitment to supporting American steelworkers, emphasizing the iconic status of US Steel as a century-old American institution that should remain domestically owned and operated.
Following Biden’s remarks, US Steel shares experienced a decline of 6.4%, compounding losses incurred the previous day upon news of the president’s impending opposition to the deal. The proposed acquisition, valued at $14.1 billion, was announced by US Steel in December, prompting a mix of reactions within the United States.
While some welcomed the prospect of new capital and technology infusion, others decried the potential loss of an iconic American brand. The deal is currently under review by the Committee on Foreign Investment in the United States (CFIUS), an interagency panel tasked with evaluating national security implications of foreign acquisitions.
Although Biden stopped short of explicitly stating his intent to block the deal, his influence over CFIUS, as the president appoints the treasury secretary who leads the committee, is significant. The United Steelworkers International, the largest industrial union in the US, applauded Biden’s stance, emphasizing the importance of retaining domestic ownership of US Steel for national security and critical infrastructure needs.
However, the US Chamber of Commerce criticized attempts to politicize the CFIUS review process, arguing that Japanese investment in the US supports millions of American jobs and underlining Japan’s status as a crucial ally. The chamber urged a thorough review of the transaction and cautioned against sending negative signals to international investors.
Biden’s intervention in the sale could potentially strain relations with Japan, a key ally in Asia, as his administration seeks to strengthen joint efforts to counter China’s growing influence. Japanese Prime Minister Fumio Kishida’s upcoming visit to the White House is expected to focus on bolstering the US-Japan alliance amidst regional challenges posed by Beijing’s assertive behavior.
