President Joe Biden has publicly opposed the acquisition of U.S. Steel Corp by Japan’s Nippon Steel, valued at $14.9 billion.
Biden emphasized the importance of U.S. Steel remaining “a domestically owned and operated American firm,” underscoring the necessity for the United States to have strong, domestically powered steel companies.
This stance comes amid U.S. Steel’s iconic status as a century-old American steel firm, with Biden stating, “U.S. 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.”
The announcement negatively impacted U.S. Steel’s stock, which dropped 6.4% to $38.26 following the news. The company has not commented on Biden’s statements.
Biden’s intervention reflects his broader political strategy, especially in an election year, highlighting his support for unions and American manufacturing.
He reassured the United Steelworkers International President, David McCall, of his support, a move that aligns with his efforts to secure union support for his re-election bid.
The proposed merger has raised concerns about national security and the United States’ ability to meet its defense and critical infrastructure needs.
McCall supported Biden’s position, emphasizing the risk of allowing a major U.S. steel manufacturer to fall under foreign ownership.
This controversy arises ahead of a planned summit between Biden and Japanese Prime Minister Fumio Kishida, potentially complicating discussions meant to strengthen the U.S.-Japan security alliance against China’s growing influence.
The Committee on Foreign Investment in the United States (CFIUS) is reviewing the deal for national security implications, with experts noting the unusual nature of presidential comments during the review process.
Nippon Steel’s acquisition offer includes commitments to address regulatory concerns, promising actions to clear CFIUS hurdles and offering a significant breakup fee if the deal fails to gain approval.
The deal has been scrutinized by U.S. lawmakers and the White House, highlighting tensions between economic interests and national security.
The outcome of this merger could influence U.S. industrial policy and international relations, especially in a critical election year for Biden.