President Joe Biden spoke out against the planned sale of US Steel to Japan’s Nippon Steel on Thursday, stating that the U.S. needs “to keep American steel companies strong and powered by American steel workers.”
In a statement, Biden added: “US Steel has been an iconic American steel company for over a century, and it is vital that it remains an American-owned and operated steel company.”
By opposing the merger, Biden has chosen to support unionized workers in a critical election year, risking backlash from the business community and a key ally in Japan.
The Thursday announcement, coming as Biden campaigns in the Midwest, could have repercussions in his race against the presumed Republican presidential candidate, Donald Trump.
The Democratic president has made restoring American manufacturing a cornerstone of his agenda as he seeks re-election, and he has the backing of the AFL-CIO and several other prominent unions.
The White House said Thursday that Biden called David McCall, president of United Steelworkers, to reaffirm his support for its members.
Nippon Steel announced in December that it planned to buy the Pittsburgh-based steel producer for $14.1 billion in cash, raising concerns about what the transaction could mean for unionized workers, supply chains, and U.S. national security.
The Japanese company has sought to ease critics by promising that no jobs will be lost due to the merger. It also pledged to keep the US Steel name and its Pittsburgh headquarters, though it noted it already has a presence in the U.S. market and would bring new resources to foster job growth.
The company, the world’s fourth-largest steel producer, launched a website with statements of support from Larry Summers, former Treasury Secretary, and Pat Toomey, a Republican and former Pennsylvania senator.
Shortly after the steel deal was announced, the White House indicated it would be reviewed by the secret Committee on Foreign Investment in the United States.
The government does not officially provide updates on the CFIUS review process.
Biden has a large platform to voice his opinion on the matter but will not intervene in the review process or formally block the deal, according to a person familiar with the deliberations who insisted on anonymity to discuss the situation.
When asked about the deal on Thursday, White House national security spokesman John Kirby declined to say whether the president wanted to stop it entirely or would be willing to modify its structure. But Kirby told reporters that the U.S. considers its alliance with Japan “stronger than ever.”
Still, the president has influence over the CFIUS. The Treasury Secretary chairs the committee, which also includes heads of federal agencies and, as deemed appropriate, directors of the White House’s National Economic and National Security Councils.
Trump said earlier this year, after meeting with the Teamsters union, that he would block the US Steel acquisition: “I would block it. I think it’s terrible that Japan is buying American steel. I would block it instantly.”
Biden traveled Thursday to Saginaw, Michigan, once home to several General Motors plants, where he hopes union worker support will resonate with voters.
The city is in a swing county that narrowly backed Trump in 2016 and then flipped to Biden in 2020, making it a crucial battleground in this year’s presidential race.
Biden has a close relationship with United Steelworkers. He gave union members “personal assurances” that he supports them, according to a union statement in February regarding Nippon Steel’s plans. US Steel is headquartered in Pennsylvania, another key state in this year’s elections.
United Steelworkers issued a statement last week after meeting with Nippon Steel representatives, expressing concerns about whether the company would honor existing labor agreements and about its financial transparency, adding that there were “barriers” to finalizing a merger.
The U.S. considers Japan one of its closest allies and a key partner in countering China’s ambitions and influence in Asia. Biden has visited the country twice as president and will host Japanese Prime Minister Fumio Kishida at the White House on April 10.
Yet Nippon Steel’s connections to China have raised concerns within the Biden administration. According to the World Steel Association, more than half of the world’s steel production comes from China. India is the second-largest producer, followed by Japan and the U.S.
The U.S. Chamber of Commerce warned in a February blog post that it would be unwise for the Biden administration to block the deal.
Doing so could harm foreign investment in the U.S., prompt other countries to block overseas investments that American companies want to make, and undermine the U.S.-Japan alliance, the chamber said.
John Murphy, the chamber’s head of international affairs, said Thursday that it was “inappropriate and counterproductive” for Biden to politicize the CFIUS review.
“It is imperative that the CFIUS review continue; and if, as expected, it reveals no national security concerns, the sale should proceed,” Murphy said.
But Sen. Bob Casey, a Pennsylvania Democrat up for re-election, praised Biden’s statement, saying: “I’ll work like hell against any deal that leaves our steelworkers behind.”
Image: Wflx
