In a move that has stirred some attention in financial markets, Japan’s Nippon Steel Corporation is poised to acquire the United States Steel Corporation for nearly $15 billion. The proposed transaction involves a significant piece of American industrial history and presents national security implications, considering Nippon Steel’s manufacturing bases in China.
The United States Steel Corporation (U.S. Steel) is an iconic name in American industry with a storied history dating back to the early twentieth century. It played an integral role in America’s “Arsenal of Democracy” during the national defense mobilization for World War II.
German steel factory puts out its last products as it prepares to shut down. The same will happen to US Steel if it’s taken over by foreign ownership. pic.twitter.com/7c4tTMZvW0
— Ian Miles Cheong (@stillgray) December 21, 2023
The proposed sale has garnered scrutiny from various corners, including politicians across the spectrum. Democratic Senator John Fetterman, alongside his colleagues Bob Casey and Chris Deluzio, has raised concerns over Nippon’s operations in China. Their unease reflects a broader anxiety about potential security risks associated with foreign control over a vital American industry.
Furthermore, the transaction has attracted attention from the Biden administration. Economic adviser Lael Brainard indicated that the Committee on Foreign Investment in the United States (CFIUS), chaired by Treasury Secretary Janet Yellen, would subject the deal to “serious scrutiny.” This scrutiny is warranted, given the strategic importance of a robust domestic steel industry to both the U.S. economy and national security.
The involvement of China in this equation adds a layer of complexity. The mere presence of Nippon’s manufacturing bases in cities like Suzhou and Wuhan in China raises questions about the prudence of allowing such a crucial segment of America’s industrial base to fall under foreign control. These concerns are amplified by the current geopolitical climate, where U.S.-China relations continue to be a topic of significant strategic importance.
Fetterman is right:
"The acquisition of US Steel by a foreign company is wrong for workers and wrong for Pennsylvania. I’m gonna do everything I can to block it." pic.twitter.com/s7VCv9eP1R
— Citizen Free Press (@CitizenFreePres) December 18, 2023
On the political front, the deal has unified voices from both parties in their apprehension. Senator Fetterman’s condemnation of the sale as “absolutely outrageous” echoes the sentiment of Republican Senators J.D. Vance and Josh Hawley. Their collective stance underscores a rare bipartisan agreement on the importance of maintaining domestic control over key industries.
This unease is not just confined to the political sphere. The United Steelworkers (USW) union has expressed its opposition, highlighting the risk to workers’ contracts and the broader impact on the community and national manufacturing capabilities. USW President David McCall’s remarks underscore the union’s position that U.S. Steel prioritizes short-term financial gains over workers’ interests and national needs.
Amid these concerns, U.S. Steel assures that Nippon Steel will respect existing collective bargaining agreements and maintain the company’s headquarters in Pittsburgh. They argue that this acquisition will bolster the American steel industry and secure jobs. However, these assurances have not allayed concerns the deal could compromise America’s manufacturing autonomy and security.