Pittsburgh, Pennsylvania – President Joe Biden has taken a stance against the proposed sale of a Pittsburgh-based steel manufacturer to Japan’s largest steel producer. Emphasizing the importance of upholding American steel companies operated by American workers, Biden’s opposition to US Steel’s acquisition by Nippon Steel reflects his efforts to solidify support among unions and blue-collar workers in Pennsylvania, a crucial swing state in the upcoming presidential election.
In 2020, Biden narrowly secured victory in Pennsylvania, winning by less than 100,000 votes after former President Donald Trump carried the state in 2016. Trump had previously expressed his opposition to the deal, labeling the potential takeover of the iconic US brand as “a horrible thing.” Biden, echoing Trump’s sentiment, stated, “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.”
Following Biden’s remarks, US Steel shares experienced a 6.4 percent decline, adding to losses from the previous day upon news of the president’s impending opposition to the acquisition. The $14.1 billion takeover agreement announced by US Steel with Nippon Steel in December faced mixed reactions in the US, with some viewing it as a source of new capital and technology and others lamenting the potential loss of an iconic American brand.
The proposed acquisition is currently undergoing review by the Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS), which is tasked with making decisions irrespective of political influences. While Biden did not explicitly state that he would block the deal, his authority over CFIUS as the president, who appoints the treasury secretary leading the committee, cannot be overlooked.
The United Steelworkers International, the largest industrial union in the US, applauded Biden’s position, emphasizing the importance of maintaining domestic ownership and operation of US Steel to safeguard national defense and critical infrastructure needs. However, the US Chamber of Commerce criticized attempts to politicize the CFIUS review process, highlighting Japan’s role as a significant ally in American interests.
Despite potential tensions with Tokyo stemming from Biden’s intervention, US-Japan relations are expected to be a focal point during the upcoming visit of Japanese Prime Minister Fumio Kishida to the White House. The discussions are anticipated to center on reinforcing the alliance between the two nations in response to China’s expanding influence in the region.