By Takuya Karube,
U.S. President Joe Biden said Thursday that United States Steel Corp. should be domestically owned, coming out against Nippon Steel Corp.'s plan to acquire the company as support from labor unions is becoming more significant for his reelection bid.
"It is important that we maintain strong American steel companies powered by American steel workers. I told our steel workers I have their backs, and I meant it," Biden said in a statement.
Such comments ahead of the November presidential election will almost certainly turn the Japanese company's plan to buy the U.S. producer for over $14 billion into even more of a political issue.
"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," Biden said.
Former President Donald Trump, who seeks to defeat Biden to return to the White House, has also said he would "block" Nippon Steel's plan, announced in December.
The two companies believe the merger, creating the world's third-largest steelmaker by volume, would benefit both sides.
The Tokyo-based steelmaker has said its advanced production technology would improve the U.S. firm's operations. It has also promised to leave the name and branding of U.S. Steel unchanged, while vowing no jobs would be lost as a result of the acquisition.
The U.S. steelmaker, founded in 1901, was once an industrial leader but has fallen to 27th in global output. It is headquartered in Pittsburgh, Pennsylvania, a key battleground state in the election.
Nippon Steel has also said it would keep the U.S. firm's Pittsburgh head office and manufacturing facilities, enabling its products to continue to be made in the United States.
But unionized workers are not in favor of the $14.1 billion, all-cash transaction, although it values the legacy company at $55 per share, representing a 40 percent premium over its closing stock price on Dec. 15 last year.
On Thursday, shares of the U.S. company tumbled 6.4 percent to finish at $38.26.
According to the White House, Biden on Thursday called United Steelworkers International President David McCall, who in early February disclosed that the president stood with its members in opposing the merger.
McCall welcomed Biden's latest statement, saying "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."
He said the 81-year-old Democratic president's words "should end the debate: U.S. Steel must remain 'domestically owned and operated.'"
A U.S. president has no direct authority to interfere in this kind of private-sector deal, and it is extremely rare for such comments to be made prior to an interagency committee concluding its review on national security grounds.
Biden's statement came days after the nominating races for the Nov. 5 election have made it all but certain that he faces a rematch against Trump, a 77-year-old former president who leads the incumbent in head-to-head races in some national polls and key swing states.
The U.S. Chamber of Commerce on Thursday warned against "politicizing" Nippon Steel's acquisition of the U.S. company.
Biden's statement was also released at a time when the United States and Japan are preparing for an official visit to Washington next month by Japanese Prime Minister Fumio Kishida.
White House national security spokesperson John Kirby said Biden is committed to iconic U.S. steel producers remaining in American hands, but declined to go beyond the president's own words when asked to clarify whether he wants the deal to die.
Kirby told reporters that Biden, who will host Kishida as a state guest, has "an awful lot to talk about, an awful lot to explore" with the Japanese leader when they meet on April 10.
"The alliance with Japan is stronger than it's ever been and it's a real keystone to peace and security in the Indo-Pacific. So we're looking forward to that visit and we believe it's going to be a very, very productive one," he said.
The Biden administration has said Nippon Steel's plan should be scrutinized in terms of its potential impact on national security, despite the offer being from a key U.S. ally.
The Committee on Foreign Investment in the United States, also known as CFIUS, is in charge of examining and determining whether certain foreign investment transactions in U.S. firms pose national security threats.
"That review will surely support the transaction given Japan's status as one of America's most important and reliable allies," John Murphy, the chamber's vice president and head of international issues, said in a statement on Thursday, pointing out that Japanese investment in the United States supports nearly a million jobs in the country.
"Officials must be careful not to send a chilling signal to international companies that U.S. politics may put their job-creating investments in the U.S. at risk," he said. "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."
Related coverage:
Nippon Steel rebuffs Trump criticism over U.S. Steel deal
U.S. says to investigate Nippon Steel, U.S. Steel merger
Nippon Steel to buy U.S. Steel for $14. bil. in all-cash deal
