▶ U.S. STEEL
election year at the risk of upsetting the business community and an ally in Japan. Thursday’s announcement, coming as Biden is campaigning in the Midwest, could have ripples in his race against the Republican presidential nominee, Donald Trump.
The Democratic president has made the restoration of American manufacturing a cornerstone of his agenda as he seeks re-election, and he has the endorsements of the AFL-CIO and several other unions. The White House said Thursday that Biden called David Mccall, president of United Steelworkers, to reiterate his support for its members.
Nippon Steel announced in December that it planned to buy the Pittsburgh-based steel producer for $14.1 billion in cash, raising concerns about what the transaction could mean for unionized workers, supply chains and U.S. national security.
The Japanese company has tried to assuage critics by promising no job losses from the merger. It also committed to keeping the U.S. Steel name and Pittsburgh headquarters, while noting it already has a presence in the American market and would bring in new resources to foster job growth.
The company, which is the world’s fourth-largest steel producer, launched a website with supportive statements from Larry Summers, the former treasury secretary, and Pat Toomey, a Republican and former senator from Pennsylvania.
Shortly after the steel deal was announced, the White House indicated it would be under review by the Committee on Foreign Investment in the United States. The government does not officially provide updates on the CFIUS review process.
Biden has a big megaphone to weigh in on the matter, but he is not intervening in the review process or formally blocking the deal, according to a person familiar with deliberations who insisted on anonymity to discuss the situation.
When asked about the deal on Thursday, White House national security spokesman John Kirby declined to say if the president wanted to stop it outright or would be amenable to changes in its structure. But Kirby told reporters that the United States sees its alliance with Japan as “stronger than it’s ever been.”
Still, the president holds sway over CFIUS. The treasury secretary leads the committee, which is also composed of the heads of federal agencies and, as deemed appropriate, directors of White House councils on the economy and national security.
Trump said this year after meeting with the Teamsters union that he would stop the U.S. Steel acquisition: “I would block it. I think it’s a horrible thing, when Japan buys U.S. Steel. I would block it instantaneously.”
The United Steelworkers issued a statement last week after meeting with representatives from Nippon Steel that it had concerns about whether the company would honor existing labor agreements and about the company’s financial transparency, adding that there were “barriers” to closing a merger.