U.S. warns against Nippon merger with U.S. Steel, citing China steel glut

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Donald Trump,Kamala Harris,U.S. Republican Party

Nippon Steel's proposed takeover of U.S. Steel would create national security risks from hurting steel supply for critical projects, the U.S. said in a letter.

This picture taken on Feb. 16, 2024 shows a logo of Nippon Steel Corp. at the company's Kyushu manufacturing base in Kitakyushu city of Fukuoka Prefecture. U.S. President Joe Biden plans to express concern over Nippon Steel's proposed $14.9 billion purchase of U.S. Steel, a person familiar with the matter said on Wednesday, pushing the U.S. company's stock nearly 13% lower on bets the deal could face greater political opposition.Nippon Steel's proposed $14.

The letter provided a first glimpse of the national security grounds that the Biden administration could use as a basis for its expected move to block the merger, even as the companies and many industry experts questioned the strength of the arguments. Many Republican and Democratic lawmakers have voiced opposition to the deal. Vice President and Democratic presidential candidate Kamala Harris said on Monday at a rally in Pennsylvania, the swing state where U.S. Steel is headquartered, that she wants U.S. Steel to remain "American owned and operated." Her Republican rival Donald Trump has pledged to block the deal if elected.

While U.S. Steel has aggressively petitioned for trade relief against foreign imports, Nippon Steel has at times opposed U.S. efforts for relief, CFIUS said. Nippon even proposed a national security agreement, aimed at assuaging CFIUS concerns. It also pledged that a majority of U.S. Steel's board of directors will be non-dual U.S. citizens, including three independent directors approved by CFIUS to oversee compliance with the agreement.

 

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