Why White House seeks 'serious scrutiny' of Nippon Steel's $15 billion US Steel deal?
Nippon Steel has assured that existing contracts with US Steel union workers would be honoured
December 23, 2023
The White House has called for a national security investigation into Nippon Steel's proposed $15 billion acquisition of US Steel, despite Japan being considered a "close ally."
Expressing concerns over the potential impact on supply chain reliability, the White House stated on Thursday, emphasising that even though Japan is a key ally, the purchase of the iconic American-owned company by a foreign entity warrants serious scrutiny.
Lael Brainard, Joe Biden's national economic adviser, conveyed the president's viewpoint, stating, "The purchase of this iconic American-owned company by a foreign entity—even one from a close ally—appears to deserve serious scrutiny."
President Biden views US Steel as a crucial component of domestic steel production.
Amid the ongoing focus on pro-union policies, the White House highlighted Biden's belief in the importance of union workers, stating, "President Biden believes union workers are the best workers in the world."
The United Steelworkers (USW) union, a powerful voice in the industry, criticized the deal as "shortsighted" and welcomed the White House's statement.
The union expressed concerns about the potential impact on the future of domestic steel production, alleging that US Steel prioritizes short-term financial gains for shareholders over the welfare of workers.
Nippon Steel defended its $15 billion purchase, citing enhanced long-term growth prospects by expanding its footprint in the US.
The company assured that existing contracts with US Steel union workers would be honoured, and the name, brand, and headquarters in Pittsburgh would be retained.
US Steel, a 122-year-old steelmaker, has been seeking a buyer since August, rejecting smaller bids from domestic rivals.
Nippon Steel's offer, nearly twice the amount offered by US bidders, positions the acquisition as one of the largest in the global steel industry.
Established in 1901 by industrial titans Andrew Carnegie and JP Morgan, US Steel, once a global giant, has faced challenges from cheaper foreign competition over the years.
The company, currently employing over 22,000 people globally, including more than 14,000 in the US, remains a focal point amid the shifting dynamics of the steel industry.
