Nippon Steel has labeled political opposition to its $14.9 billion acquisition of US Steel as “inappropriate,” asserting that the deal is crucial for U.S. economic security against China. President Biden is expected to block the acquisition due to national security concerns, based on a review from the Committee on Foreign Investment in the U.S. (CFIUS). Meanwhile, US Steel faces financial difficulties, and the United Steelworkers union opposes the acquisition, viewing Nippon Steel’s offer of a $5,000 employee bonus as a mere tactic.
Nippon Steel Responds to Political Opposition on US Steel Acquisition
The renowned Japanese steel manufacturer, Nippon Steel, labeled the political resistance against its proposed acquisition of US Steel as “inappropriate.” This declaration follows reports suggesting that President Joe Biden plans to block the $14.9 billion deal. Nippon Steel emphasized that the transaction is vital for enhancing the economic security of the United States, particularly in countering threats from China. “It is inappropriate for politics to overshadow the genuine interests of national security,” the company asserted.
Biden’s Stance and CFIUS Review
According to Bloomberg, sources indicate that President Biden aims to formally obstruct the acquisition due to national security concerns before his term concludes in January. The president is expected to act on the recommendations from the Committee on Foreign Investment in the United States (CFIUS), which is anticipated to deliver its findings around December 22 or 23. Robyn Patterson, a spokesperson for the White House, noted, “The president believes it is crucial for US Steel to remain American-owned and operated.” Patterson added that the CFIUS review is still in progress, and the administration is awaiting its conclusions.
The CFIUS is responsible for examining the implications of foreign investments in American companies, specifically regarding national security. Nippon Steel has expressed confidence in the U.S. judicial system and is prepared to collaborate with US Steel to ensure a fair outcome. Yoshimasa Hayashi, a spokesperson for the Japanese government, commented on the importance of strengthening economic ties between Japan and the U.S. without specifically addressing the US Steel situation.
Following the political climate surrounding the acquisition, the CFIUS review and White House decisions were postponed until after the recent presidential election. President-elect Donald Trump has also stated his intention to block the acquisition if it remains unapproved upon his inauguration, aligning with his protectionist stance. “I oppose the idea of US Steel, once a formidable force, being acquired by a foreign entity. We will restore its strength through tax incentives and tariffs,” Trump reaffirmed in early December.
Despite the political tensions, business groups from both Japan and the U.S. urged the review committee to remain impartial. US Steel, facing financial difficulties, warned that a failed acquisition could jeopardize significant modernization investments, leading to layoffs and potential mill closures. Following Bloomberg’s reports, US Steel’s stock dropped nearly 10% on Wall Street, while Nippon Steel’s shares fell slightly in Tokyo.
The United Steelworkers (USW) union expressed strong opposition to the acquisition, fearing it could disrupt the workforce. Nippon Steel has committed to safeguarding jobs and has pledged to invest at least $2.7 billion in unionized facilities. In a bid to alleviate union concerns, Nippon Steel proposed a $5,000 bonus for US Steel employees in the event of a successful acquisition, a move characterized by vice president Takahiro Mori as a demonstration of long-term commitment.
However, the USW criticized this gesture, labeling it a “classic tactic” to gain public favor. “Nippon Steel is attempting to bribe us, pure and simple. This offer does not address the significant damage that this agreement could inflict on our steel industry or the serious implications for our national security,” the union stated in a response.