US Steel Sale to Japanese Under Siege

It is premature to declare Nippon Steel's bid to buy US Steel dead, despite election year politics driving acerbic scrutiny from Labor and legislators.

April 17 President Joe Biden told a crowd in Pittsburgh U.S. Steel “has been an iconic American company for more than a century and it should remain totally American,” and saying it was “vital for it to remain an American steel company that is domestically owned and operated.”
“American-owned, American-operated by American union steelworkkers — the best in the world — and that’s going to happen, I promise you,” he told the crowd.
"The partnership between U.S. Steel and Nippon Steel is the right combination to ensure that U.S. Steel remains an iconic American company for generations to come," the steelmakers said in a joint statement. "Its iconic name will be unchanged, and its products will remain mined, melted and made in America,"

The United Steelworkers continue to scoff at Nippon Steel's overtures, calling them "nothing more than another collection of empty promises and open-ended language that would enable it to skirt obligations to workers and retirees.
Nippon Steel had sent a letter to the USW on March 27 in its an attempt to gain union support for its proposed purchase of U.S. Steel. According to the USW, the letter was "another meaningless piece of paper."

Ohio Democratic Sen. Sherrod Brown is urging President Biden to examine the relationship between Nippon Steel and the Chinese steel industry as the company seeks to buy US Steel. In a letter to the President, Sen. Brown pointed to a new report from geopolitical and risk intelligence provider Horizon Advisory that details the longstanding relationship between Nippon Steel and the Chinese steel industry and the dangers it could pose to US national and economic security.

The proposed sale of US Steel to Nippon currently is under review by the inter-agency Committee on Foreign Investment (CFIUS) in the United States to determine whether there are any potential national security risks.

Bloomberg reports the Steelworkers Union is promoting national defense concerns that the replacement of blast furnaces with electric arc plants could restrict military-grade steel production.
“As you examine this deal, I urge you to thoroughly investigate the allegations raised in this report and examine Nippon’s ties to the Chinese government and the danger this merger poses to American national and economic security,” Sen. Brown wrote.

“We cannot allow our US industrial base to be compromised through further entanglement with one of our biggest national security threats, and our largest economic competitor that we know does not follow our trade laws.”

Sen. Brown chairs the Senate Banking Committee and is a member of the Finance Committee. He is up for reelection this November in a tight race. Should the Nippon acquisition be derailed, constituent steelmaker Cleveland-Cliffs has proposed buying US Steel for 45 percent less, though antitrust hurdles would be profound.

Japan is the United State’s leading source of foreign direct investment, with more than 900,000 Americans employed at US subsidiaries and affiliates of Japanese companies. Over 73,000 Ohioans are employed by 860 Japanese companies, including Honda Motor Co., Ltd. Bridgestone Corporation, and Fujitec Co., Ltd.