Source: AFP
President Joe Biden said Thursday 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 $14.1 billion acquisition comes less than a month before he hosts Japanese Prime Minister Fumio Kishida for a state visit to the White House aimed at strengthening ties and dealing with China.
But Biden’s eyes are apparently on November’s US presidential election against Donald Trump, with lawmakers from both parties joining unions opposing the sale of an icon of US industry to a foreign owner.
“It’s important to keep strong American steel companies powered by American steelworkers. I told our steelworkers I have their back and I meant it,” Biden said in a statement.
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“US Steel has been an iconic American steel company for more than a century, and it is vital that it remains a domestically owned and operated American steel company.”
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.
Shares of US Steel fell 5.3% in premarket trading after Biden’s statement.
In a joint statement, Nippon Steel and US Steel said they believed the deal should go through, saying it reflected the “close alliance between Japan and the United States.”
“We welcome the administration’s review of the transaction, as an objective and comprehensive review of this transaction will demonstrate that it enhances US jobs, competition, and economic and national security,” they said.
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“We will continue to support this agreement and are confident that a fair and careful evaluation will lead to its approval.”
‘Horrible’
Source: AFP
But the proposed sale has become a football election year 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 face Trump 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 in a heartbeat. Absolutely,” he said.
It is also at the center of Biden’s campaign manifesto pledge to rebuild American manufacturing, with concerns that a foreign takeover could send the wrong message to the electorate.
Biden is wooing US unions ahead of the election as he competes with Trump for vital working-class voters.
Unions reacted furiously to the proposed deal, despite the combined company’s promise to honor agreements between US Steel and the United Steelworkers (USW) union.
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In December the USW scrapped the proposed deal as a reflection of a “greedy, short-sighted attitude” by US Steel that dates back to 1901, and questioned Nippon’s ability to honor contracts.
At the time, the transaction also drew bipartisan outcry on Capitol Hill, with Pennsylvania Democratic Sen. John Fetterman calling the deal “absolutely outrageous.”
Trump ally Ohio Sen. JD Vance and two other Republicans have called on 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 scrutinized, warning that it could have national security implications.
The companies in December asked the Committee on Foreign Investment in the United States (CFIUS) — an interagency body established to review foreign takeovers of US companies — to review the deal.
Source: AFP