US Steel plant in Pennsylvania, USA - February (©AP=Kyodo)
On September 4, Western media, including The Washington Post, reported that President Joe Biden is nearing a decision to block Nippon Steel's proposed acquisition of US Steel. The President, citing national security concerns, is expected to issue an executive order blocking the deal.
This move is viewed as a strategic effort to gain union support with the presidential election approaching. There is strong opposition to the acquisition in Pennsylvania, the company's home state.
US National Security Advisor John Kirby commented on the matter in a press conference. He said simply that, "The President believes that American steel companies should be US-owned."
CFIUS Key to Next Step
The proposed takeover has been met with resistance from the United Steelworkers (USW). Democratic Vice Presidential candidate Kamala Harris has expressed caution in recent public remarks. Former President Donald Trump, the Republican candidate, has stated that he too would block the acquisition if reelected.
The Committee on Foreign Investment in the United States (CFIUS) is reviewing Nippon Steel's proposed acquisition of US Steel. Should the committee identify "valid security concerns," President Biden is prepared to issue an executive order blocking the deal. According to The Financial Times, CFIUS has already informed Nippon Steel that these security risks are significant and cannot be ignored.
Election Politics
Both US Steel and the United Steelworkers (USW) are headquartered in Eastern Pennsylvania. It is a key battleground in the upcoming November presidential election. As the race between Kamala Harris and Donald Trump tightens, many believe Biden is blocking the acquisition to gain labor union support for Harris. This strategy could potentially influence the election outcome.
However, on September 4, US Steel warned that halting the deal could jeopardize thousands of union jobs. Additionally, several foreign policy experts have cautioned that blocking the acquisition could damage Japan-US relations. They add that these relations are crucial for counterbalancing China's growing influence in global affairs.
RELATED:
- The Evolution of Nippon Steel and Where It's Headed
- All Dissemblers: US Steel and American Distrust
- Why Does Nippon Steel Want to Acquire US Steel?
(Read the report in Japanese.)
Author: Hiroo Watanabe, Washington Bureau Chief, The Sankei Shimbun
