Biden Supports Investigation of Nippon Steel's Bid for US Steel on National Security Grounds
President Joe Biden has expressed support for an investigation into Nippon Steel's proposed $14.9 billion acquisition of US Steel, citing national security concerns. This stance underscores a complex political dynamic, as Japan is one of the United States' closest allies.
The acquisition, which has sparked bipartisan concern in Washington, presents a challenging scenario for Biden. As a self-proclaimed champion of American jobs and pro-union leader, the president is confronted with the potential impact of a foreign entity purchasing a significant American-owned company.
Lael Brainard, Biden’s national economic adviser, emphasized the importance of scrutinizing the deal, especially considering its potential effects on national security and supply chain reliability. The concerns are heightened due to US Steel's presence in key states like Pennsylvania and Michigan, which are crucial for Biden's potential re-election bid in November.
The White House's support for investigating the deal aligns with Biden's broader efforts to revitalize communities affected by deindustrialization. Brainard indicated that the Committee on Foreign Investment in the United States (Cfius), the panel responsible for reviewing deals for national security threats, is well-positioned to investigate this transaction. The administration plans to closely monitor Cfius's findings and take appropriate action if necessary.
The United Steelworkers union, which endorsed Biden in 2020, has welcomed the White House's intervention. The union's international president, David McCall, echoed the administration's concerns about the deal's potential impact on domestic steel production.
Nippon Steel, on the other hand, has assured that it will honor existing collective bargaining agreements and commitments to employees. The company, representing 850,000 US manufacturing workers, believes the acquisition will benefit all stakeholders and is open to dialogue with government authorities and other relevant parties.
In response to US calls for an investigation, Japan's chief cabinet secretary Yoshimasa Hayashi refrained from commenting on what he described as an "individual company's management issue." He reaffirmed the strength of the Japan-US alliance and the ongoing cooperation between the two countries in various sectors, including economic security.
This situation has also garnered attention in Congress, with both Republican senators and Democratic Senator Jon Fetterman from Pennsylvania expressing concerns about the acquisition. They have requested Cfius to review the deal.
Nippon Steel's bid has significantly influenced US Steel's stock value, with shares trading above their pre-bid levels. The company's agreement to pay $55 per share for US Steel has raised the latter's stock price, closing higher than before the bid was announced.
This development represents a critical juncture in US economic policy, balancing national security concerns with maintaining strong international alliances and supporting domestic industries. As the investigation proceeds, it will likely have implications for US industrial policy, foreign investment, and bilateral relations with Japan.