Japanese Industry Minister Ken Saito assured on Friday that the ties between the United States and Japan remained "stronger than ever."
However, he refrained from directly addressing the escalating scrutiny in the US regarding the proposed acquisition of US Steel by Nippon Steel, valued at $14.1 billion.
Security Concerns Surround US-Japan Steel Deal
The logo of Nippon Steel Corp. is seen at an office building where the company's head office in Tokyo on December 19, 2023. Shares in Japan's Nippon Steel sank more than six percent on December 19 after it announced a deal to buy US Steel for more than $14 billion that will create the world's number two steelmaker.
During a routine press conference, Minister Saito acknowledged a statement from the US National Economic Council director expressing the need for "serious scrutiny" of the deal. While he avoided commenting on private transactions, Minister Saito emphasized the robustness of US-Japanese relations.
During a recent interview with CNBC, US Commerce Secretary Gina Raimondo emphasized President Biden's dedication to upholding a strong domestic steel industry, citing national security as a primary motivation.
In response to the Nippon Steel and US Steel deal, Raimondo refrained from offering direct commentary. However, she did emphasize that foreign acquisitions of American steelmakers would undergo increased scrutiny.
US Steel, once a global leader, has faced declining fortunes amid the nation's economic shift. The $21 billion revenue in the past year is equivalent to what Walmart generates in just two weeks. Despite the decline, US Steel CEO David Burritt defended the deal, stating it ensures a competitive domestic steel industry while strengthening global presence.
The deal, which has sparked criticism from both the steel industry and lawmakers in the United States, has become a subject of backlash. In a strong statement, the United Steelworkers union has condemned the acquisition, labeling it as "greedy" and "shortsighted."
The union has vowed to take action by urging regulators to intervene and prevent the sale to a foreign entity. Governor Raimondo echoed concerns, emphasizing the United States government's steadfast refusal to back any agreement that would undermine the interests of American workers, the steelworker union, or the industry, according to CNN News.
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Senators, CEO Worry About Steel Industry's Defense Role
Government officials, including Ohio Republican Senator J.D. Vance and Pennsylvania Democratic Senator John Fetterman, expressed skepticism, citing concerns about the steel industry's role in national defense. Cleveland-Cliffs CEO Lourenco C. Goncalves echoed these sentiments, advocating for domestic production and opposing foreign ownership.
The White House, while acknowledging Japan as a "close ally," expressed reservations about the deal's potential impact on national security and supply chain reliability.
Lael Brainard, Joe Biden's national economic adviser, emphasized the need for scrutiny, considering the purchase of an iconic American-owned company by a foreign entity, even from a close ally.
As President Biden positions himself as pro-union, the powerful United Steelworkers union welcomed the White House's stance, stating that the deal could impact the future of domestic steel production. US Steel, actively seeking a buyer since August, rejected smaller domestic bids, making Nippon's offer almost double what US bidders were willing to pay.
The historic company, founded in 1901, has witnessed a decline in dominance over the years due to foreign competition. Nippon Steel sees the acquisition as enhancing its long-term growth prospects, honoring existing contracts with US Steel union workers, and retaining the company's name, brand, and headquarters in Pittsburgh, BBC News reported.
Related Article: Once World's Largest Corporation US Steel To Sell Itself to Japan's Nippon Steel
