Biden Opposes Sale of US Steel to Japanese Company

Beth Brelje
By Beth Brelje
March 14, 2024Business News
Biden Opposes Sale of US Steel to Japanese Company
A worker leaves U.S. Steel Edgar Thomson Steel Works in Braddock, Pa., on March 10, 2018. (Drew Angerer/Getty Images)

When the historic American company U.S. Steel announced in December 2023 that it had struck a $14.9 billion deal to sell the company to Japan-based Nippon Steel Corp., Washington politicians immediately spoke of blocking the transaction.

U.S. Sens. Bob Casey (D-Pa.) and John Fetterman (D-Pa.) and Rep. Chris Deluzio (D-Pa.) sent a letter in December 2023 to Treasury Secretary Janet Yellen, chair of the Committee on Foreign Investment in the United States, urging the committee to block the proposed acquisition.

At the time, President Joe Biden’s administration said the plan deserved “serious scrutiny,” but he was noncommittal in his position.

Now, in a March 14 statement, President Biden has come out in clear opposition.

“It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it,” the statement said. “U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

Steel plays a major role in national security as the main material used in building ships, airplanes, ammunition, and firearms.

President Biden’s position may be tied to the voter support he seeks from the 850,000 members represented by the United Steelworkers union (USW), which also opposes the sale, favoring instead a sale to a U.S.-owned company.

Cleveland-Cliffs mining company in Ohio made a cash-and-share bid for U.S. Steel in August 2023, valuing the company at $7.25 billion. The union had favored that deal, which kept ownership in the United States.

Union Opposition to Sale

USW International President David McCall issued a response on March 14, welcoming President Biden’s comments and highlighting concern for long-term economic and national security.

“Allowing one of our nation’s largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defense and critical infrastructure needs,” Mr. McCall said. “The president’s statements should end the debate: U.S. Steel must remain ‘domestically owned and operated.’ President Biden told USW members he has our backs, and there’s no question that he meant it.”

The union has filed grievances against U.S. Steel related to the proposed sale, alleging that the company violated union contracts when it entered into a sale agreement. The USW had previously negotiated successorship rights into the basic labor agreements and was worried that the new company wouldn’t honor those agreements in the long run.

U.S. Steel told The Epoch Times that it complied with its obligations under the Basic Labor Agreements and will continue to work with the union.

Nippon Steel had agreed to keep U.S. Steel’s name and headquarters in Pittsburgh, but it would become a wholly owned subsidiary of Nippon Steel under the terms of the sale.

In a November 2023 investor relations briefing, Nippon Steel indicated that it intends to make steel where it’s needed, stating that its global strategy is to abandon the idea of maintaining domestic production capacity by earning marginal profits from exports and instead build a system that captures local demand through local production.

Mr. Fetterman has taken interest in the sale from the beginning.

“I live in a steel community,” the senator said in a statement. “My home in Braddock, PA, is right across the street from U.S. Steel’s Edgar Thomson plant. I’ve long said that steel is about security—both national security and the economic security of the workers and steel communities. We cannot let these steelworkers and these communities get sold out by executives who only care about lining their own pockets. The president’s opposition to this disastrous proposed sale is a significant step. I’m proud to stand with President Biden and the United Steelworkers. We have to block this sale.”

Just this week, a bipartisan group in the Senate proposed the Stop Mexico’s Steel Surge Act, which would reinstate Section 232 tariffs on imports of steel from Mexico, as U.S.-based steelmakers worry about a surge in Mexican steel imports.

The Mexican government is violating a 2019 agreement with the United States and threatening the jobs of steelworkers in Pennsylvania and across the nation, Mr. Casey said in a statement this week.

“When foreign governments cheat on trade, Pennsylvanians lose their jobs,” he said. “It’s past time to make Mexico play by the rules.”

The legislation is backed by Mr. Casey and fellow Sens. Sherrod Brown (D-Ohio), Tom Cotton (R-Ark.), Marco Rubio (R-Fla.), Rick Scott (R-Fla.), Elizabeth Warren (D-Mass.), Mike Braun (R-Ind.), Ted Budd (R-N.C.), John Boozman (R-Ariz.), and J.D. Vance (R-Ohio).

Also this week, Mr. Casey, who is seeking reelection, joined with Sen. Tammy Baldwin (D-Wisc.) and the USW to push the Biden administration to investigate and impose tariffs on the Chinese Communist Party’s shipbuilding industry.

Over the past 20 years, the United States has lost industrial shipbuilding capacity “as a result of China’s increasingly aggressive subsidization of their shipbuilding,” Mr. Casey said in a statement. “Chinese state-owned enterprises and other facilities in China are now capable of producing over 1,000 ocean-going vessels a year, while the United States currently produces fewer than ten.”

From The Epoch Times

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