Even after President Joe Biden banned the $15 billion proposal last week due to national security concerns, Tokyo, the largest steelmaker in Japan, announced on Tuesday that it will not abandon its efforts to acquire U.S. Steel.
Concerned that it would damage U.S. relations with a crucial diplomatic and commercial ally in Asia—the two nations are each other’s largest foreign investors—the blockage of the proposed agreement by Nippon Steel clouded outgoing Secretary of State Anthony Blinken’s final trip to Japan.
The chairman and CEO of Nippon Steel, the fourth-largest steelmaker in the world, Eiji Hashimoto, stated that there was no need or motive to abandon the proposal.
In Tokyo, he told reporters, “This is not just the most important matter for our company’s business strategy.” I sincerely believe that this is something that will be very advantageous to both the United States and Japan.
Strong supporters of the transaction, Nippon Steel and U.S. Steel, sued the Biden administration and others on Monday, claiming that Biden disregarded the law in order to curry favor with union members who opposed the deal.
According to the lawsuit, no president has ever forbidden an acquisition by a business headquartered in Japan, one of our closest allies.
Blinken claimed that the U.S.-Japan partnership was stronger than ever after meeting with Japanese Prime Minister Shigeru Ishiba on Tuesday. When asked about the Nippon Steel proposal by NBC News, he remained silent.
The Committee on Foreign Investment in the United States, a government panel that assesses foreign investments for national security threats, was unable to come to an agreement last month, so the White House was left to make the decision. Biden stated that it was crucial to maintain American-owned U.S. Steel in order to prevent the disruption of vital supply lines and the loss of employment when he announced his intention to block it on Friday.
White House spokesman Robyn Patterson responded to the lawsuit on Monday by saying that a committee of trade and national security specialists concluded that this transaction would put American national security at risk. President Biden will never back down from defending this country’s infrastructure, supply chains, and security.
On Monday, the Justice Department chose not to comment on the case.
Nippon Steel has stressed in its marketing of the proposal that U.S. Steel would continue to be American-run, that its headquarters would stay in Pittsburgh, and that the takeover would not result in facility closures or layoffs. Additionally, it stated that China, which produces more than half of the world’s steel, would win if the agreement fell through.
Nearly immediately after its announcement in December 2023, as the United States entered an election year, the proposed acquisition of U.S. Steel, headquartered in the battleground state of Pennsylvania, sparked controversy. The powerful United Steelworkers union fiercely opposed the agreement, despite the support of certain U.S. Steel workers.
Lourenco Goncalves, the leader of U.S. Steel rival Cleveland-Cliffs, and David McCall, the president of the United Steelworkers, are both being sued by Nippon Steel and U.S. Steel for allegedly engaging in unlawful coordination to thwart the deal.
Goncalves accused the firms of attempting to use others as scapegoats, while McCall stated that he was studying the lawsuit.
Biden ran against the bid, as did President-elect Donald Trump, Vice President Kamala Harris, and his replacement as the Democratic nominee.
Since winning the election in November, Trump has repeatedly opposed the accord. On Monday, he stated that the proposed blanket tariffs on all U.S. imports will increase the value and profitability of U.S. Steel.
Hashimoto stated on Tuesday that his company’s acquisition of U.S. Steel was the only way to guarantee its ongoing success in light of the incredibly challenging and unpredictable circumstances facing the American steel sector.
According to him, tariff policies by themselves won’t boost the sector.
Jennifer Jett reported from Hong Kong, while Abigail Williams and Arata Yamamoto reported from Tokyo.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!