Opposition to US Steel, Nippon deal growing; Biden says US ownership ‘vital’

Nippon Steel's proposed $14.9-billion purchase of US Steel (USS) could face additional challenges, with US President Joe Biden publicly cementing his opposition to the already heavily criticized deal

“US 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,” Biden said in a statement released by the White House on Thursday, March 14. 

“I told our steel workers I have their backs, and I meant it,” he said, adding: “It is important that we maintain strong American steel companies powered by American steel workers.”

Senator Bob Casey of Pennsylvania, where US Steel is headquartered, echoed that sentiment.

“Pennsylvania workers are the American steel industry’s greatest asset. I have long held concerns that this sale could be a bad deal for our workers, and I share President Biden’s commitment to maintaining an American steel industry,” Casey told Fastmarkets on Thursday.

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“People are [upset] that a foreign company wants to purchase US Steel,” a distributor told Fastmarkets on Thursday, indicating that the transaction would be less controversial if it were not an election year in the United States. “There are jobs at stake; nobody cares about a steel mill being sold unless it’s US Steel.”

US Steel and Nippon did not respond to Fastmarkets’ requests for comment by the time of publication.

While the Biden administration previously pledged “serious scrutiny” of the tentative takeover of US Steel by Japan’s Nippon Steel Corp, the statement on Thursday marks the first time the president has publicly weighed on the matter since Nippon first announced its plans in December.

Widespread criticism

According to Samir Kapadia, managing principal and head of trade at The Vogel Group, the president’s opposition to the deal was not surprising.

“For nearly four years, [the Biden administration] has espoused the notion that they’ve ushered in a new renaissance of American manufacturing. I don’t see anyone in the administration giving an okay to this transaction. If they were to give an okay to this notion, it would defeat the purpose of that promise and all that work,” he told Fastmarkets on Thursday.

Indeed, the transaction has been openly criticized by members of Congress from both sides of the aisle, who have voiced concerns around the national security implications of selling a US manufacturer for the defense and infrastructure industries to a foreign entity.

The United Steelworkers (USW) labor union also welcomed the president’s statement on Thursday.

“We’re grateful for his unfailing support and his ongoing commitment to advancing the interests of working families and their communities,” David McCall, international president of the USW, said. “Allowing one of our nation’s largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defense and critical infrastructure needs.”

The USW has been a vocal opponent of the potential acquisition, despite Nippon Steel’s repeated assurances to assume all union agreements.

While the USW signed a non-disclosure agreement (NDA) with Nippon Steel last month, the union said the NDA was a not crucial development in their negotiations.

Following the latest round of talks between the union and Nippon Steel, the USW said on March 7 that a meeting with the steelmaker “yielded no progress” and that the company has still not earned the union’s trust.

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