Biden says it’s ‘vital’ for U.S. Steel to remain owned and operated by Americans

U.S. Steel should remain a domestically owned and operated company, President Joe Biden said Thursday, implicitly rejecting an attempt by the Japanese company Nippon Steel to buy the iconic U.S. manufacturer.

Biden issued a brief written statement Thursday morning that did not name Nippon, which announced a deal in December to acquire Pittsburgh-based U.S. Steel.

“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said. “I told our steel workers I have their backs, and I meant it. 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.”

The White House in December called for “serious scrutiny” of the $14.1 billion deal, which is under review by the Committee on Foreign Investment in the United States, an executive branch body.

Pennsylvania’s U.S. Sens. Bob Casey and John Fetterman, both Democrats, have opposed the deal and applauded Biden’s statement.

“Pennsylvania workers are the American steel industry’s greatest asset,” Casey said in a news release. “I have long held concerns that this sale could be a bad deal for our workers, and I share President Biden’s commitment to maintaining an American steel industry. My number one priority is protecting union jobs in the Mon Valley and I’ll work like hell against any deal that leaves our Steelworkers behind.”

Fetterman tweeted a screenshot of a Reuters headline indicating Biden would oppose the deal and added his own encouragement to block the deal.

“Jam this up,” he wrote. “Stand with (the United Steelworkers union.) Steel is national Security. Thank you @POTUS for standing with these union members and steel communities like mine.”

In a statement, United Steelworkers International President David McCall said the union welcomed Biden’s comments and shared his concerns over the deal’s long-term implications.

“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,” McCall said. “The president’s statements should end the debate: U.S. Steel must remain ‘domestically owned and operated.’”

Representatives for U.S. Steel and Nippon Steel did not immediately return messages seeking comment.

Review process unclear

A website bearing the imprints of both U.S. Steel and Nippon Steel says “no jobs will be lost as a result of the transaction.”

But that pledge is nonbinding, according to an aide to a senator opposed to the deal, and skeptics worry the promise is mere lip service.

It is unclear exactly what power the administration holds to block the deal.

The CFIUS review process is somewhat secretive and not well understood. The interdepartmental committee is chaired by the Treasury secretary and is composed of other high-ranking presidential appointees, including the attorney general and secretaries of Homeland Security, Commerce, Defense, State and Energy.

Casey, Fetterman and U.S. Rep. Chris Deluzio, a Democrat from Western Pennsylvania, wrote a letter to Treasury Secretary Janet Yellen shortly after the deal’s announcement in December asking CFIUS to block the deal for national security concerns.

The committee should consider whether the merger would cede control of a key domestic industry to a foreign interest, they wrote.

While Nippon’s home country of Japan is not a foreign adversary, the company does business and operates facilities in China, the lawmakers added. A Commerce Department investigation also determined Nippon sold some products below market value, they said.

“We question whether a foreign company that has been found to be dumping steel into the U.S. market at prices below fair market value is the best buyer for U.S. Steel,” the Pennsylvania Democrats wrote. “Of further concern, Nippon Steel has facilities in the People’s Republic of China, a foreign adversary of the U.S.”

U.S. Steel as a global economic force has diminished since its height as the world’s first billion-dollar corporation in the early 20th century. In 2020 and 2021, it was the 27th-largest steel producer in the world, according to a list compiled by the international trade group World Steel Association. The same list ranked Nippon fourth.
But the company still represents a major industry, especially in Pennsylvania. Winning over the company’s unionized workforce could be crucial to Biden’s campaign in the key swing state this year.