Biden set to voice concerns over proposed Japanese purchase of US Steel

President Biden is preparing to issue a veiled statement of opposition to Nippon Steel's proposed acquisition of U.S. Steel before Japanese Prime Minister Fumio Kishida arrives in Washington for a state visit scheduled for April 10, according to three people close to the file.

White House lawyers are drafting the presidential expression of concern even as the Committee on Foreign Investment in the United States (CFIUS) reviews the proposed takeover.

Shares of US Steel plunged nearly 13 percent following these reports. Nippon Steel rose 2 percent.

The announcement of the president's plans follows a meeting last week between Nippon Steel executives and representatives of the United Steelworkers union, which publicly opposed the $14.9 billion deal. Prominent lawmakers from both parties have also opposed a foreign buyer's purchase of a once-iconic American industrial powerhouse.

In January, former President Donald Trump, Biden's likely opponent in November, said of the deal that he would instantly block it if it was returned to the White House.

Administration officials briefed the Japanese government on the president's plans, explaining the statement by the need to maintain political support in Pennsylvania in the November election, said an industry source, who described the matter under the guise of anonymity to comment on internal deliberations. .

Biden won Pennsylvania in 2020, beating Trump by more than 80,000 votes in the key state. Support from unions, particularly the United Steelworkers union, was key to winning the Keystone State for Biden, who often boasts of being the most pro-union president in American history.

The metalworkers' union returned his affection. This month, USW President David McCall praised the president's efforts to promote domestic manufacturing and infrastructure.

President Biden has delivered victory after victory for working people in his first three years in office, and Steelworkers look forward to working with him as he continues his fight for middle-class growth and an economy for all. McCall said in a statement.

The president's plan to issue a statement on the Japan deal was first reported by the Financial Times.

In December, Lael Brainard, director of the National Economic Council, said Nippon Steel's bid for the U.S. company merited careful consideration.

Any presidential statement before CFIUS completes its assessment of the national security implications of the deal would be unusual.

“I am not aware of any president preemptively signaling that he might object to an acquisition that is subject to national security review, much less an acquisition by a company from a treaty partner that we are obligated to defend with American troops,” said Dan Price, general manager of Rock Creek. Global Advisors, who was the top White House official on international trade and investment during the George W. Bush administration.

The CFIUS review, led by Treasury and involving representatives from the Department of Defense and the intelligence community, is intended to be apolitical, said Nancy McLernon, executive director of the Global Business Alliance, which represents foreign companies in the UNITED STATES.

Japan is a strategic ally and the largest foreign investor in the United States, directly employing nearly 1 million American workers. Facts that I hope the administration will keep in mind as it prepares for next month's state visit, she said in an email.

The controversy surrounding the Nippon Steel proposal also illustrates the tensions at the heart of Biden's international economic policy. In August, the White House celebrated an increase in foreign investment in American factories. But Nippon Steel's intention to do the same has sparked presidential unease, largely because of domestic political factors.

The steel industry has traditionally been one of the most protected US markets. In 2018, then-President Trump imposed 25% tariffs on imported steel. Biden then agreed with the European Union to allow imports of European steel up to a certain level before tariffs would apply.

The name US Steels holds a special place in the country's economic history. The company was the nation's first billionaire corporation after it was formed in 1901 by a merger of steel companies led by legendary business leaders, including John D. Rockefeller.

Production from its blast furnaces gave rise to the tanks, planes and aircraft carriers that helped win World War II, as well as the automobiles and appliances that consumers bought during the boom. after war.

US Steel today is only the nation's third-largest steel producer by revenue, behind Cleveland-Cliffs and Nucor, and employs less than half as many as 20 years ago. The company has lost money in nine of the last 15 years.

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