Biden opposes Japanese takeover of US Steel, touts ‘American steel workers’ | Business and Economy

US president’s remarks come as he is seeking to shore up support in key swing state of Pennsylvania.

United States President Joe Biden has opposed the proposed sale of a Pittsburgh-based steel manufacturer to Japan’s largest steel producer, insisting on the need for “strong American steel companies powered by American steelworkers”.

Biden’s opposition to US Steel’s acquisition by Nippon Steel comes as the Democrat is looking to shore up support among unions and blue-collar workers in the key swing state of Pennsylvania ahead of November’s presidential election.

Biden won Pennsylvania by fewer than 100,000 votes in 2020, after former President Donald Trump in 2016 became the first Republican to carry the state since 1988.

Trump said earlier this year that he would block the deal, describing the proposed takeover of the US brand as “a horrible thing”.

“I told our steelworkers I have their backs, and I meant it,” Biden said in a statement on Thursday.

“US 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.”

US Steel shares slid 6.4 percent following Biden’s remarks, after sinking the previous day on news the president would express his opposition to the deal.

US Steel, the second-largest steel producer in the US, announced in December that it had agreed to be bought by Nippon Steel in a $14.1bn takeover.

The announcement provoked mixed reactions in the US, with some welcoming the prospect of an injection of new capital and technology and others decrying the selling off of an iconic American  brand.

The proposed acquisition is currently under review by the Department of the Treasury’s Committee on Foreign Investment in the United States (CFIUS), which is supposed to make decisions without regard to political considerations.

While Biden on Thursday did not explicitly say he would block the deal, he holds sway over CFIUS since the treasury secretary, who leads the committee, serves at the pleasure of the president.

United Steelworkers International, the biggest industrial union in the US, welcomed Biden’s remarks.

“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 defence and critical infrastructure needs,”  USW International President David McCall said in a statement.

“The president’s statements should end the debate: US Steel must remain ‘domestically owned and operated’.”

The US Chamber of Commerce criticised “attempts to politicise” the CFIUS review process.

“That review will surely support the transaction given Japan’s status as one of America’s most important and reliable allies,” US Chamber of Commerce Senior Vice President John Murphy said in a statement.

“Japanese investment in the US supports nearly one million American jobs, and officials must be careful not to send a chilling signal to international companies that US politics may put their job-creating investments in the US at risk. For these reasons, it’s imperative that the CFIUS review proceed; and if, as expected, it reveals no national security concerns, the sale should proceed.”

Biden’s intervention risks upsetting Tokyo, one of Washington’s closest allies in Asia, as his administration looks to bolster joint efforts to counter China.

Japanese Prime Minister Fumio Kishida is due to visit the White House on April 10 for talks that are expected to focus heavily on strengthening the US-Japan alliance in the face of Beijing’s growing assertiveness.