President Biden will block the merger of US Steel and Nippon based on alleged national security risks. It’s really the opposite. 
US Steel Drops as Biden Set to Block Nippon Steel Deal
On December 10, Bloomberg reported US Steel Drops as Biden Set to Block Nippon Steel Deal
President Joe Biden plans to formally block the $14.1 billion sale of United States Steel Corp. to Nippon Steel Corp. on national security grounds once the deal is referred back to him later this month, people familiar with the matter said.
The Committee on Foreign Investment in the United States [CFIUS] panel, which has been reviewing the proposed takeover for much of this year, must refer its decision to Biden by Dec. 22 or 23, said the people, who asked to not to be identified discussing a confidential process.
Biden — born in US Steel’s home state of Pennsylvania — has long signaled opposition to the sale, and has said the company would remain domestically owned. At the same time, he has stopped short of a pledge to kill the deal, while President-Elect Donald Trump has promised repeatedly to block it.
“The President’s position since the beginning is that it is vital for US Steel to be domestically owned and operated,” White House spokesperson Saloni Sharma said. “The CFIUS process was and remains ongoing.”
[In response to the blocked deal] Shares of US Steel tumbled as much as 22% and closed 9.7% lower at $35.26. “This transaction should be approved on its merits,” company spokeswoman Amanda Malkowski said.
“It is inappropriate that politics continue to outweigh true national security interests — especially with the indispensable alliance between the U.S. and Japan as the important foundation,” Nippon Steel said in a statement.
The powerful United Steelworkers union has also opposed the deal. Vice President Kamala Harris echoed Biden’s stance during her campaign as the Democratic nominee in the presidential election.
It’s unusual for CFIUS to reject acquisitions by entities based in a friendly nation such as Japan.
No National Security Risk
The Pentagon, US Treasury and state department have all concluded that Nippon Steel’s $15bn acquisition of US Steel poses no national security risks, even though President Joe Biden is expected to block the deal. The conclusions come despite Biden’s insistence that the purchase of the Pittsburgh-based steelmaker poses economic and national security risks.
Several senior officials have told the Financial Times that the deal presents no national security risks and that Biden’s opposition was political. “There is no credible analysis in the inter-agency that supports Biden,” said one former US official familiar with the internal debate.
The above from the Financial Times.
Trump Again Vows to Block Takeover of US Steel
CNN reports Trump Again Vows to Block Takeover of US Steel
President-elect Donald Trump has again indicated that he intends to block a Japanese firm’s $15 billion takeover bid of US Steel upon taking office, saying the former American giant can eventually stand on its own.“Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again,” he said on his Truth Social platform on Monday. “As President, I will block this deal from happening. Buyer Beware!!”
US Steel said in September it would be forced to lay off workers and shutter mills without Nippon’s backing. It had put itself up for sale last year after receiving an unsolicited $7 billion takeover offer from Ohio-based Cleveland Cliffs. The $14.9 billion offer from Nippon Steel resulted from that sale process.
The US Steel-Nippon merger would reduce, not increase national security risks.
The Hidden Politics Behind the Nippon-US Steel Deal
The Beacon discusses the Hidden Politics Behind the Nippon-US Steel Deal
If the buyer were Chinese, preventing the deal on national security grounds might have more merit since the two countries are rivals engaged in various disputes. However, since its defeat in WWII, Japan has been a US vassal, with only a small self-defense force, in part due to constitutional renunciation of war.
In the past, Japan has been allowed to buy assets with far greater strategic significance. For example, Toshiba purchased Westinghouse Electric, a leading provider of nuclear fuel and services to utilities globally, in 2006, when the nuclear power market was taking off. In that deal, CFIUS granted regulatory approval less than four months after the sale agreement was signed.
Competition is another possible issue. Last year, steelmaker Cleveland Cliffs offered $8.3 billion for USS. The union supported that bid, but the company rejected it. Automakers wrote to Congress, complaining that the combined company would control 65-90% of automotive steel. This is not the case with the Nippon bid.
Lost in this discussion is the reason for the deal: to help arrest USS’s decline and stave off possible plant closings and bankruptcy. Steel prices have steadily declined since COVID-19 closures and supply chain disruptions. Given the cooling Chinese economy, particularly the construction sector, this trend looks set to continue.
Thus, if the acquisition makes economic sense, has been approved by shareholders and management, and poses no competitive or national security risk, why would the Bidden/Harris White House block it?
However, blocking the deal can backfire: If the deal falls apart, USS could be forced to close steel mills and fire workers. (Predictably, this is precisely what USS management threatened after rumors of political roadblocks to the deal surfaced. Just as predictably, Cleveland Cliffs offered to buy those facilities, maybe at the much lower price it offered.) This would devastate the local economy and could sour voters on politicians who lobbied for it.
Politics in Play
That article was written in September. It asked “Why would the Bidden/Harris White House block it?”
Biden-Harris would block it for the same reason trump will. Both are liars trying to appeal to union leaders, the country be damned.
U.S. Steel Workers Rally for Nippon Steel
The Pittsburg Post-Gazette reports U.S. Steel Workers Rally for Nippon Steel
Hundreds of steelworkers braved freezing temperatures to rally Thursday afternoon for the imperiled $15 billion takeover of U.S. Steel by Nippon Steel as President Joe Biden and President-elect Donald Trump continue to oppose the sale.
Speakers described the Japanese investment as crucial to the future of Mon Valley Works facilities and urged federal officials and United Steelworkers President David McCall to visit the plants and speak with impacted workers.
“Without this deal with Nippon Steel, we will be the last generation to work here at this historic steel plant,” said Brian Pavlack, a third-generation steelworker and member of the USW local in Clairton.
“I also want to call out Senator [John] Fetterman for not backing the sale. You go on national television and you say you’re with the steelworkers and live across the street from the [Edgar Thomson] plant. I’m telling you now, Mr. Fetterman, 90% or more of the steelworkers are for the sale.”
In a statement, U.S. Steel CEO David Burritt — who was not at the rally — described Nippon’s acquisition as “the only scenario where significant investments would occur across the unionized, integrated facilities, including in Mon Valley Works.”
“We need to get the deal done,” he said.
Local mayors and other elected officials talked about the transformative potential of Nippon’s planned $2.7 billion investment and expressed anxiety about a potential presidential block.
“Time is running out,” Clairton mayor Richard Littanzi said. “Speak to your family, your friends, relatives, co-workers, and say, ‘Hey, listen, we have got to get this deal done. If not, the Mon Valley is dead.’”
Nippon Steel Bid Agreement
- Nippon would invest $2.7 billion in union-represented local steel facilities. This would allow the US to better compete against China.
- The merger would give American manufacturers access to high-quality, domestically produced steel.
- The merger would strengthen ties with key allies
- The merger would increase US competition within the US, while keeping production here.
- As a result of the above, the merger would produce stronger, cleaner, more advanced steel here at home for the benefit of American consumers and at a cheaper price due to investments.
Merger Would Lower National Security Risks
Cleveland Cliffs merger would have control 100% of blast furnace production in the U.S. and 65% to 90% of domestic steel used in vehicles.
That’s the real security threat.
U.S. Steel workers support the Nippon merger, so does Gary Indiana, and so does anyone with an ounce of common sense including UAW workers who fear higher prices for cars.
The US already has the among the highest prices for steel in the world. The last thing the US needs is higher prices for cars that are already hugely unaffordable.
The investment by Nippon into more advanced processes would lower prices and increase competition.
Gut Punch
The TribLive reports ‘Gut punch’: Trump upsets local union leaders by opposing U.S. Steel-Nippon deal
On Monday night, President-elect Donald Trump reiterated his opposition to the proposed $14.9 billion sale of U.S. Steel to Japan’s Nippon Steel Co., vowing to block the deal when he takes office.
Some steelworkers in Pittsburgh’s Mon Valley who support the deal — and Trump — weren’t happy.
“I am very frustrated with the news that came out last night,” United Steelworkers Local 2227 Vice President Jason Zugai said during a panel discussion Tuesday in Washington, D.C. “I didn’t expect that to come out. So that was like a gut punch.”
Also standing in opposition is the leadership of the United Steelworkers. Its president, David McCall, told TribLive last month that despite fractures among his membership, he remains firmly against any deal.
Maskil told the panel convened by the Hudson Institute, a Washington, D.C., think tank, that 95% of the employees at the Irvin Works now support the Nippon purchase. He suspects that a majority of workers across all three Mon Valley facilities back the deal.
What to Expect
Currently, Trump and Biden both say they are against the deal despite the wishes of U.S. steel workers, the UAW, and common sense.
It’s a case of politics over genuine US interests.
The best we can hope for is Trump changes his mind, renegotiates some minor aspect of the deal, approves it, and then brags about the art of the deal.
Watching the hypocrites will be interesting if Trump reverses after negotiating some trivial change. Otherwise, expect higher prices and a loss of jobs.
It’s very rare that I side with unions, but this case is clear.
An Unfond Farewell to Federal Trade Commission Chair Lina Khan
In case you missed it, please see An Unfond Farewell to Federal Trade Commission Chair Lina Khan
Khan’s latest assault on business is reviving a 1936 antitrust theory. Getting rid of Khan will be a good thing because no one could possibly be worse.
Unfortunately, we will be saddled with a horrendous pick as Labor Secretary instead of the FTC.
I discussed this sorry state of affairs on November 25 in Trump’s Nauseating Pick for Labor Secretary Is the Teacher’s Union Favorite
Hard to believe, but Donald Trump nominated a favorite of teachers union chief Randi Weingarten as his Labor Secretary. Why would Mr. Trump want to empower labor bosses who oppose his economic agenda and spent masses to defeat him?
Meanwhile, the big question is how much more damage the Khan and the Biden administration will do before they are both gone.
Without steel mills, can’t produce the Abrams and Bradleys that are so easily destroyed by peer armed forces. Or so probably goes the thinking in the sinecures inside the Beltway.
Merging story comments results in bullshit.
You can’t just buy a steel company, merge assets and downsize. Nippon probably wants to combat cheap Chinese steel prices with a local industrial base. China is the big issue here-the politicians are racist and conflating Japanese investment with Chinese takeover. This is the only explanation as it makes no business sense and no sense for domestic manufacturing health.
The Big Shining Lie: We’re Better Off Now–No, We’re Poorer, Much Poorer
This is proof-positive we’re not just poorer now than we were 40 years ago, we’re much, much poorer. https://charleshughsmith.blogspot.com/2024/12/the-big-shining-lie-were-better-off-now.html
UK HAS A PROBLEM: Excess deaths are up a staggering 22% among 1 to 14-year-olds.
Notably, this trend didn’t start until “the magic juice started to be issued to children later in 2021.”
2020: 9 percent fewer deaths than expected
2021: 7 percent fewer deaths than expected
2022: 16 percent MORE deaths than expected
2023: 22 percent MORE deaths than expected
Furthermore, “Figures from the Office for National Statistics show about 10% more deaths (across all age groups) than expected since April this year.”
UK health officials believe “circulatory diseases and diabetes are … behind the increase.”
The Hidden Pfizer Report That Shows Heart Conditions in the Vaccinated Getting Worse Over Time
“In Pfizer’s full ‘Interim Report 5’. You will immediately notice that the incidence for each type of condition is significantly greater in the Covid vaccinated (bad) – but we already knew that from the Hazard Ratios in the abstract. What’s worse is that the curves diverge over time, i.e., the relative incidence between vaccinated and unvaccinated increases over the time period of the data in the report (December 8th 2020 – March 21st 2022).
These results don’t just affect Covid vaccinated individuals. They also have wider safety implications for, say, aviation where the third party consequences of sudden pilot incapacitation from a heart condition can be catastrophic for passengers and those on the ground – especially for single pilot operations.”
https://catalogues.ema.europa.eu/system/files/2024-06/C4591021%20Interim%205%20Study%20Report%20Abstract%20_0.pdf
CLF shareholder here because IMO CEO, Lourenco Goncalves is a first class steel man. The USW bosses would never back him if they thought he was going to lay off X union workers. This deal would have never have happened if LC hadn’t made the first unsolicited offer. It would not surprise me in the least if Biden approves the deal just to stick it to Trump. Oh by the way…Nippon sweetened the deal by promising a $5,000 bonus to each worker if the sale closed that’s why the X employees rallied in support
National security is a narrative. East and west we have two large oceans. Canada and Mexico are not a military threat. The U.S. government has nukes. No foreign government is going to be invading the U.S.
Being here in Pittsburgh, the issue is that if Cleveland Cliffs buys them, they will close the plant and HQ to go to Cleveland losing all the jobs.
Nippon buys them, the investors and execs get their payday, union may get a few more years (to get their retirement since they all old), and Nippon can back out of all this “investment” in a minute anyway (as has happened a few times before)
I love having more negatives votes than any other post now, but no one who can have any argument to the contrary.
“It’s a case of politics over genuine US interests.”
That goes without saying for Biden. W.r.t. Trump, you couldn’t be more wrong. It’s a symptom of TDS-squared. Trump is not political. After he takes office, if in fact this deal is a benefit and not a risk to the country, he will not try to block it.
My sense is that Nippon doesn’t have 15B cash sitting around. Probably engage Golden Sacks that will sell it to investors.
Making steel is a dirty, sweaty, time consuming business. Much easier to engage printed dollars sloshing in the system.
He chucked his union voters under the bus, the first of many more. You people just never learn do you?
Leverage is the reason.
“The best we can hope for is Trump changes his mind, renegotiates some minor aspect of the deal, approves it, and then brags about the art of the deal.”
And with that logic, it’s clear that you don’t want or expect Trump to be successful in anything he tries to do to MAGA. That’s very unfortunate and even sad. I for one hope that he’s able to get US Steel back on its feet with the right incentives.
Again like everything else, time will tell, but again I’m in the MAGA camp which means I want us to be successful without foreign intervention. Be that as it may, I agree that Japanese company owning US Steel is not a national security risk or at least not yet.
Incentives = handouts, you dirty little socialist.
Funny! Nothing would get done without incentives. You’re living under a rock.
Trump is playing 3D chess either that or he is an economic illiterate
Yes, Trump is an Economic/Financial illiterate!
“Trump is playing 3D chess”
ok, you lost all credibility thinking that 🙂
Nippon is ready to buy a company worth 7B or less, for 15B, paid in devalued yen? Something is fishy if the Japanese company sees value in it. Did Wall Street hollow out the company or the management?
How about Apple, valuation 3T, use some pocket change to buy just the iconic name.
Nothing fishy about it at all.
Everyone knows the reason Nippon wants to buy US Steel. That will make them a domestic producer of steel. They can then ship as much steel as they want from Japan to the US as ‘US made product’ and avoid tariffs.
Not enough money.
ABC News forced to pay $15 million to Trump to settle defamation lawsuit, George Stephanopoulos forced to issue public apology.
US corruption and brain drain makes the Nippon offer a much safer, better deal.
Better for the best US made vehicles, Toyotas.
Especially the best selling mid-size truck Tacoma, made in Mexico.
It seems sensible to adopt superior Japanese management and technology at this point.
Just a terrible decision by Biden
But let’s be honest he’s not making these decisions anyway. Who knows who is
Fortunately, the Obama era has ended.
Soon it will be Elon, right after he’s pardoned for his SEC crimes.
Swampiest swamp ever.
I read there’s some $5/ton steel at the boarder for sale …
Can FBJ and woke team be any pettier?
Maybe start a fire or spread some coke around the White House while you’re at it.