Japan’s biggest steelmaker, Nippon Steel, is sticking to its plan to buy a stake in U.S. Steel despite U.S. President Joe Biden’s orders on foreign investments in U.S. industry.
The debate over the deal flared when Nippon announced plans to acquire a minority stake in U.S. Steel, a major US steelmaker. The Japanese company’s proposed investment has led to worry among U.S. politicians over its implications for national security and economic competitiveness.
U.S. President Joe Biden recently said he opposed the deal ‘because it threatens to enable a foreign country to take control of one of our strategic industries and harm our national security industrial base.’ A few months later, the Biden administration announced it was considering blocking ‘particular investments in the steel sector if they involve a foreign acquirer and have potential U.S. national security implications.’
Nippon Steel quickly issued a press release in response to Biden’s remarks, arguing that the company would continue to act responsibly and sustainably by proceeding with its bid. The statement also quoted the company’s president, Kosei Shindo, reaffirming the Japanese company’s partnership with its U.S. counterpart. ‘Nippon Steel is dedicated to the continued revival of the U.S. steel industry,’ he said.
‘We believe that investing in U.S. Steel will further the prosperity of the U.S. steel industry,’ Shindo continued, ‘and we vow to nurture a mutually beneficial partnership with our American counterparts, upholding the highest standards and values of corporate responsibility.’
Proponents of the takeover are pitching just as the U.S. and other countries worldwide are wrestling with challenging trade and economic relations. The Biden administration has promised to be more assertive in tackling what it views as unfair trade practices and protecting America First industries from foreign competition.
Despite the general optimism of all parties involved in the deal, Nippon Steel’s acquisition of a stake in U S Steel still needs to be approved by regulators and scrutinized as an open trade matter. If the deal is approved, analysts say it could improve U.S. Steel’s position in the world market and enable it to explore synergistic cooperation and technological innovation with Nippon Steel.
Nonetheless, worries about rising foreign ownership of American companies linger among some members of Congress and industry stakeholders, especially when it comes to critically important U.S. industries such as steel production. As the experience in the U.S. shows, tensions over foreign investments in that country are unlikely to abate anytime soon as policymakers contend with competing economic, security, or diplomatic imperatives.
Source: www.nbcnews.com March 15, 2024
