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Biden is coming out in opposition to plans to sell US Steel to Japanese company

By AP

Published : March 14, 2024 - 21:24

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US President Joe Biden speaks during a campaign event in Milwaukee, Wisconsin, on Wednesday. (AFP) US President Joe Biden speaks during a campaign event in Milwaukee, Wisconsin, on Wednesday. (AFP)

President Joe Biden is coming out in opposition to the planned sale of US Steel to Nippon Steel of Japan, saying in a statement to be released Thursday that the US needs to "maintain strong American steel companies powered by American steel workers.”

In a statement obtained in advance by The Associated Press, Biden adds: “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."

Thursday's announcement, coming as Biden is campaigning in the Midwest, could have ripples in his race against the presumptive Republican presidential nominee, Donald Trump. The Democratic president has made the restoration of American manufacturing a cornerstone of his agenda as he seeks reelection, and he has the endorsements of the AFL-CIO and several other prominent unions.

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 US national security.

The Japanese company has tried to assuage critics by promising no job losses due to the merger. It also committed to keeping the US Steel name and Pittsburgh headquarters, while noting it already has a presence in the American market and would bring in new resources to foster job growth. The company, which is the world’s fourth largest steel producer, launched a website with supportive statements from Larry Summers, the former treasury secretary, and Pat Toomey, a Republican and former senator from Pennsylvania.

Shortly after the steel deal was announced, the White House indicated it would be under review by the secretive Committee on Foreign Investment in the United States. The government does not officially provide updates on the CFIUS review process.

Biden has a big megaphone to weigh in on the matter, but he is not intervening in the review process or formally blocking the deal, according to a person familiar with deliberations who insisted on anonymity to discuss the situation.

Trump said earlier this year after meeting with the Teamsters union that he would stop the US Steel acquisition: “I would block it. I think it’s a horrible thing when Japan buys US Steel. I would block it instantaneously."

Biden will travel on Thursday to Saginaw, Michigan, which was once home to multiple General Motors plants and where he hopes his backing from union workers can 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 contest in this year's presidential race.

Biden has a close relationship with the United Steelworkers. He gave the union members “personal assurances" that he has their backs, according to a February statement by the union about Nippon Steel's plans. US Steel is headquartered in Pennsylvania, another key state in this year's election.

The United Steelworkers issued a statement last week after meeting with representatives from Nippon Steel that it had concerns about whether the company would honor existing labor agreements and about the company's financial transparency, adding that there were “barriers” to closing a merger.

The US considers Japan to be 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.

But Nippon Steel's connections to China have raised concerns within the Biden administration. More than half the steel produced globally comes from China, according to the World Steel Association. India is the second-largest producer, followed by Japan and the United States. (AP)