The controversial deal that could see a historical takeover of US Steel by Japanese-owned Nippon Steel has received even more backlash as it looks more likely that the deal would go ahead due to the risk to national security.
Multinational Concerns Amidst Political Backlash
Large multinational companies have expressed concern over the politicization of the national security review of Japanese company Nippon Steel’s acquisition of US Steel.
Outrage in Washington
The proposed $14.9bn acquisition was met with huge backlash in Washington as lawmakers called for a national security investigation.
Global Business Alliance’s Plea
The Global Business Alliance (GBA) urged US Treasury Secretary Janet Yellen to ensure that any national security review focuses “only on actual facts,” despite “the rhetoric being espoused from across the political spectrum”.
GBA Criticizes Foreign Investment Committee
GBA’s Chief Executive Nancy McLernon criticized the actions of the Committee on Foreign Investments in the US (Cfius) by saying, “Cfius should never become a tool for garnering political favour or allowing domestic competitors to achieve something they cannot do in a competitive market.”
Chairing the Committee on Foreign Investment
As the head of Cfius, Janet Yellen has the power to vet any deals that could potentially harm US national security but decided against it in the Nippon Steel takeover of US steel.
The Danger of Political Influence
The GBA warned against Cfius becoming a tool for political gain, and warned about the effect on the economy that it could have if those in power try to delay the investigation from Cfius.
Uncertain Deal Outlook
Investors’ uncertainty about the deal’s outlook has kept US Steel’s shares below the agreed-upon acquisition price.
Potential Economic Damage
“Efforts to delay or derail Cfius reviews could have far-ranging consequences, damaging America’s investment climate,” McLernon warned. So, where does the President stand on this?
Backing a National Security Investigation
President Biden supports the idea of a national security investigation despite Japan being a close military ally, potentially compromising the two countries’ special relationship.
Significance in American Manufacturing
US Steel is a symbol of US manufacturing prowess and operates in states crucial for Biden’s electoral success, creating jobs and generating the welfare of hundreds of thousands of workers’ families.
Diverse Multinational Representation
The Global Business Alliance comprises nearly 200 members, including Nestlé USA, AstraZeneca, Diageo, Mercedes-Benz, Panasonic, Sony Corporation of America, and TSMC.
Lawmakers Demand Blocking the Deal
Republican lawmakers, including JD Vance, Josh Hawley, and Marco Rubio, have all called for blocking the Nippon Steel and US Steel deal.
Democratic Resistance
Democratic members of Congress and senators from Pennsylvania, where US Steel is based, also oppose the acquisition.
United Steelworkers Union’s Grievance
The United Steelworkers union expresses their hostility, stating that neither Nippon Steel nor US Steel consulted them in advance.
USU’s Disappointment in Deal
In a statement, the United Steelworkers union said, “To say we’re disappointed in the announced deal between U.S. Steel and Nippon is an understatement, as it demonstrates the same greedy, shortsighted attitude that has guided U.S. Steel for far too long.”
Lack of Respect For Workers?
“US Steel chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company,” claimed David McCall, President of the United Steelworkers union.
US Steel Accused of Betrayal
In December, USW President David McCall accused US Steel of violating the rules of an acquisition of the company, “Neither U.S. Steel nor Nippon reached out to our union regarding the deal, which is in itself a violation of our partnership agreement that requires U.S. Steel to notify us of a change in control or business conditions,” he noted.
Democratic Congress Member Takes a Stand
Democratic Congress member Summer Lee, representing Pennsylvania, also voiced opposition to the acquisition, “We spent the day talking to community members and workers and we feel the same – blindsided and concerned about the sale of U.S. Steel to Nippon Steel,” she said.
A Diplomatic Challenge
The Nippon Steel and US Steel deal is both a diplomatic and political challenge, drawing intense scrutiny from lawmakers, multinational corporations, and even the company’s own workforce.
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