U.S. President Joe Biden is expected to express apprehension regarding Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, a move that has triggered a nearly 13% decline in the U.S. company’s stock amidst concerns of potential political opposition to the deal. The issue is poised to cast a shadow over the upcoming summit between Biden and Japanese Prime Minister Fumio Kishida, aimed at reinforcing the enduring security alliance between their nations in light of China’s increasing influence.
Nippon Steel’s agreement to purchase the iconic 122-year-old U.S. steelmaker in December has drawn criticism from both Democratic and Republican senators, citing national security implications and questioning the lack of consultation with U.S. Steel’s primary union prior to the announcement. Former President Donald Trump had previously expressed intentions to block the acquisition if elected, emphasizing the critical role of U.S. Steel in national security.
While the White House has refrained from commenting on the matter, sources indicate that Biden will issue a statement regarding the planned acquisition before Kishida’s state visit. The proposed deal has raised concerns about its potential impact on U.S. jobs, competition, and economic and national security, prompting a thorough review by the Biden administration.
Amidst ongoing discussions and scrutiny, Nippon Steel and U.S. Steel have emphasized their commitment to engaging with stakeholders, including the United Steelworkers union, and have welcomed the comprehensive evaluation of the transaction to demonstrate its benefits.
The unfolding situation underscores the complexities surrounding foreign acquisitions in strategic industries, with implications for bilateral relations, economic security, and political dynamics between the U.S. and Japan.