US steel sales to a Japanese competitor could face government scrutiny, the US Commerce Secretary says

Jane J. Pushkar/AP

This is part of US Steel’s Edgar Thomson plant in Braddock, Pennsylvania, on Monday.



CNN

A potential takeover of US Steel by a rival Japanese steelmaker may face opposition from the US government, according to comments made by US Commerce Secretary Gina Raimondo.

“President Biden is very focused on making sure that we have a vibrant steel industry in the United States for national security purposes,” Raimondo said in an interview with CNBC that aired Thursday.

While Raimondo declined to comment directly on US Steel’s Agreement to be purchased Nippon Steel, Japan’s largest steelmaker, said for $14.1 billion that a deal in which a foreign company buys an American steelmaker would require further examination.

“I think it’s fair to say it’s going to receive a lot of scrutiny, because we have to protect the American steel industry, American production, and American steelworkers,” she said.

It was once US Steel Most valuable company In the world, but as the country’s economy shifted from manufacturing to services, the 122-year-old company’s business declined. US Steel’s revenue of $21 billion last year is roughly what Walmart brings in every two weeks.

“We’re confident that this combination is truly what’s best for everyone,” US Steel CEO David Porritt said Monday. “Today’s announcement also benefits the United States – ensuring a competitive domestic steel industry, while strengthening our global presence.”

Although US Steel’s revenues declined, the deal faced backlash from both the steel industry and US lawmakers.

The United Steelworkers union said it would urge regulators to block the sale of US Steel to a foreign company, calling the deal “greedy” and “short-sighted.”

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“We have remained open throughout this process to work with US Steel to keep this iconic American company locally owned and operated, but it has instead chosen to set aside the concerns of its dedicated workforce and sell it to a foreign-owned company,” the United Steelworkers union said. President David McCall.

On Thursday, Raimondo echoed the union’s concerns, saying the U.S. government “could never support any deal that would undermine American workers, the steelworkers union, or the steelworkers industry.”

Raimondo isn’t the only government official to express doubts since the deal was announced Monday.

Ohio Republican Senator J.D. Vance urged US Steel to reject a takeover offer from a foreign entity because of the steel industry’s role in producing military equipment.

“Today, an important part of the US defense industrial base was auctioned off to foreigners for money,” he said on Monday.

Democratic Pennsylvania Sen. John Fetterman, who was previously mayor of Braddock, Pennsylvania, where one of US Steel’s first plants still operates, said he would work to block the deal.

“Steel is always about security, whether our national security or the economic security of our steel communities. I am committed to doing anything I can do, using my platform and position, to prevent this foreign sale,” Fetterman said.

At least one of US Steel’s local competitors has spoken out against the deal as well.

Lourenco C. said: Goncalves, CEO of Cleveland-Cliffs and American Iron and Steel Corporation: “It is important that we keep our production within the United States.” “We cannot allow foreign ownership. We cannot allow foreign companies to come in and take away American jobs.”

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Cleveland-Cliffs has previously offered to buy US Steel, and Goncalves said his company is still interested in a deal.

CNN’s Chris Isidore contributed reporting.

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