President Biden calls for U.S. Steel to remain domestically owned and operated

President Joe Biden has spoken out against Nippon Steel's proposed $14.9 billon acquisition of U.S. Steel, saying he would prefer the iconic American steel company to remain American-owned.

“It is important that we maintain strong American steel companies powered by American steelworkers," Biden said in a statement. I told our steelworkers I have their backs, and I meant it. 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.”

His chief rival for the White House, Republic presidential candidate Donald Trump, also has spoken out against the acquisition.

Pittsburgh-based U.S. Steel, which was founded in 1901 by some of the most famous names in the annals of American business and became the world's first billion-dollar company, put itself up for sale after an unsolicited takeover offer from rival Cleveland-Cliffs. The company rebuffed Cleveland-Cliffs and accepted a proposal from Nippon Steel that would allow it to continue to operate as Nippon Steel's U.S. subsidiary, maintaining its headquarters in Pittsburgh and all its employees.

The United Steelworkers union has opposed an acquisition, favoring the bid from Cleveland-Cliffs, a company the union said it has had an easier time negotiating with in the past. The union has raised concerns about foreign ownership of U.S. Steel, including that it could result in fewer trade cases and tariffs protecting domestic steelmaking from steel dumping by foreign competitors. 

“The USW welcomes President Biden’s statement on the proposed USS-Nippon deal and shares his concerns over the sale’s long-term implications for our economic and national security," USW International President David McCall said. “Allowing one of our nation’s largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defense and critical infrastructure needs."

The deal is expected to face both antitrust and national security scrutiny. U.S. Steel in part rejected Cleveland-Cliffs' offer because of doubts antitrust regulators would allow the last two integrated steelmakers to merge into one company.

“The president’s statements should end the debate: U.S. Steel must remain ‘domestically owned and operated,'" McCall said. “President Biden told USW members he has our backs, and there’s no question that he meant it. We’re grateful for his unfailing support and his ongoing commitment to advancing the interests of working families and their communities.”

Both U.S. Steel and Nippon have touted benefits of the deal, such as that no jobs would be lost and Nippon Steel would honor all of U.S. Steel's labor agreements while giving it more capital and technology to be competitive on a global stage.

"Our transaction delivers clear benefits to U. S. Steel, union workers, the broader American steel industry, and American national security," Nippon Managing Director Jack Coster said. "Through increased financial investment and the contribution of our advanced technologies to U. S. Steel, Nippon Steel will advance American priorities by driving greater quality and competitiveness for customers in the critical industries that rely on American steel while strengthening American supply chains and economic defenses against China. No other U.S. steel company on its own can meet this challenge while also meeting antitrust requirements. Our aim is to bolster and grow U. S. Steel in the U.S. market in a way that prioritizes its talented employees, and we have provided significant commitments to the USW in our continued efforts to reach a mutually agreeable resolution. These include job security, pension security, capital investment, technology sharing, financial reporting, and the ability to enforce contractual obligations post-closing."

Nippon Steel, already the world's fourth largest steelmaker, would come close to the rarefied level of producing more than 100 million tons of steel a year. That would make it the world's second largest steelmaker after only China Baowu Steel Group, according to the World Steel Association.

"Nippon Steel is the right partner to ensure that U. S. Steel is successful for generations to come as an iconic American company," Coster said. "We are progressing through the regulatory review, including CFIUS, while trusting the rule-of-law, objectivity, and due process we expect from the U.S. Government. We are determined to see this through and complete the transaction."

The proposed deal has faced bipartisan headwinds in Congress, which members of both parties voicing concerns.

"I welcome the President joining myself, members of the Congressional Steel Caucus, and the United Steelworkers, who have been adamantly opposed to the foreign acquisition of U.S. Steel since the beginning," said U.S. Rep. Frank Mrvan, D-Highland. "I supported the Infrastructure Investment and Jobs Act, with the strongest Buy America requirements in our nation’s history, to support the domestic manufacturing base, not set it up for sale. I urge the administration to follow up this rhetoric with action to prevent this acquisition and defend the strength of the American worker, domestic steel industry, and our national security."