Photo by Christophe Dion on Unsplash
Biden Opposes US Steel Sale to Japan’s Nippon Steel
March 15, 2024
President Joe Biden recently declared his stance against the announced sale of the U.S. Steel company to Japan’s Nippon Steel, and he emphasized the importance of maintaining American ownership and operation of the iconic company. The announcement represents the “strongest opposition yet from the White House to a controversial deal that has drawn some bipartisan criticism.”
Biden stressed the crucial need to uphold American steel companies and their employees, firmly pledging support for their well-being. The administration’s worries about Nippon’s Chinese assets have only intensified concerns about the proposed sale, raising questions about the potential impact on domestic industries and employment.
On the other hand, Nippon Steel has reaffirmed its commitment to bolstering and expanding U.S. Steel in the American market. Despite offering significant commitments to the United Steelworkers (USW) union, the company has encountered substantial resistance from the Biden administration.
Previously, the administration had backed a thorough review of the $14.1 billion deal, citing potential national security and supply chain implications.
Following the announcement of Biden’s opposition, U.S. Steel’s shares plummeted by 13% on Wednesday and dropped an additional 3% on Thursday. The president’s resistance precedes the ongoing national security review led by the Committee on Foreign Investment in the United States (CFIUS).
While the Treasury Department has refrained from commenting, the U.S. Chamber of Commerce warns against politicizing the deal, emphasizing the importance of a meticulous CFIUS review.
Michael Leiter, an expert on CFIUS and national security matters, labeled Biden’s intervention as “highly unusual,” hinting at possible obstacles in securing approval. The move also raises concerns among allies like Japan about protectionist sentiments.
Amidst the political complexities surrounding the deal, its fate remains uncertain pending the outcome of the CFIUS review, leaving stakeholders on edge about the future of the iconic American company and its implications for the broader economy.
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