President Joe Biden will announce his opposition to the sale of U.S. Steel to Japanese-based Nippon Steel today during a speech in Michigan — a statement that casts serious doubt on the sale of the storied American firm.
“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 will say, according to a statement from the White House.
The statement is the strongest yet from the White House on the deal, going further than Biden’s economic adviser Lael Brainard, who said in December that the deal deserves serious scrutiny. And it highlights the political dilemma the administration faces as it reviews the sale of an iconic American firm during election season where steel workers are a sought-after voting bloc for both parties.
Former President Donald Trump has already come out in opposition to the deal, saying he would block it on his first day back in office.
The Japanese government, which has lobbied for the sale, says that it feels election year politics are at the heart of Biden’s statement.
“As long as the [U.S.] is in a campaign, we see a huge difficulty out there” in completing the deal, said a Japanese government official, granted anonymity to discuss the pending deal, “although the company is trying so hard.”
Biden’s statement, itself, does not kill the deal. The sale is currently under review by the Committee on Foreign Investment in the U.S., and the White House has not indicated that Biden would seek to directly intervene in that ongoing process.
Even so, any eventual decision from the committee will have to go back to the White House for review, so Biden’s statement could indicate that he will view any agreement that comes out of CFIUS harshly. The Japanese government says it continues to push Biden to allow the national security review to go on uninhibited.
“Whether or not [Biden’s] words mean killing the deal remains to be seen,” said the Japanese government official, “since there might be some technical questions. And of course we hope it doesn’t mean the end of the deal.”
A key sticking point for the deal has been opposition from the United Steelworkers union, whose members in Midwestern swing states like Pennsylvania and Wisconsin could be decisive in November’s elections for president and control of the Senate. Biden will mention steel workers in his speech today opposing the deal.
“It is important that we maintain strong American steel companies powered by American steel workers,” he will say. “I told our steel workers I have their backs, and I meant it.”
USW has pushed Biden behind the scenes to block the deal, but the Japanese government is hopeful that if Nippon can come to an agreement with the union, opposition from the White House could soften.
Nippon “is really committed to sincere talks with USW to resolve this conundrum,” said the Japanese official, “and they will not easily give up, we believe.”
The pending deal could become a diplomatic headache for Biden when Japanese Prime Minister Fumio Kishida visits Washington next month. It’s still unclear if Kishida will make the deal a key aspect of his visit, the Japanese official said, “though this issue is pretty important for us.”
