Steel coalition between Japan and USA falters – Dispute over Nippon Steel and US Steel

The planned takeover of US Steel by the Japanese company Nippon Steel is faltering, as a key US committee could not reach an agreement on whether President Joe Biden should support the $15 billion deal. This development increases the likelihood that Biden could block the venture in the final weeks of his term. The Committee on Foreign Investment in the US (Cfius) has reported to the White House that there is no consensus within the committee, which consists of nine agencies, on whether the takeover poses security risks. The deadline for a decision by Cfius, which expired on Monday, has now brought the matter to the President’s desk. Biden had previously spoken out against the takeover plans, further increasing the likelihood of a blockade. If Biden does indeed stop the takeover, it could cast a shadow over the trans-Pacific alliance between the US and Japan and raise questions about the increasingly politicized security process. Nippon Steel objects to the assessment and asserted that it has taken measures to dispel national security concerns, including the intention to protect American jobs and strengthen steel production in the US. Within the Cfius committee, there was disagreement on whether Nippon Steel's proposals suffice to guarantee these goals. A central opposition in the committee came from Katherine Tai, the US Trade Representative, although the majority of agencies saw no security concerns regarding the takeover. Nippon Steel is already considering possible legal steps against the US government if the deal is rejected. Takahiro Mori, Vice President of Nippon Steel, recently launched a charm offensive to allay concerns of politicians and workers on-site in the US. Particularly persistent resistance is coming from the United Steelworkers Union under the leadership of David McCall, a close ally of Biden.