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Joe Biden has declared his opposition to Nippon Steel’s proposed $14.9bn purchase of US Steel, saying it was “vital” for the American steel company to remain “domestically owned and operated”.
In a statement issued on Thursday, the US president characterised his decision as an effort to side with American workers, at a time when he is under pressure in his re-election campaign to retain the blue-collar vote in the face of aggressive courting by his Republican rival Donald Trump.
But the declaration risks damaging Washington’s relationship with Japan, one of its closest allies, at a time the US is attempting to rally friends in the region to contain a frequently belligerent regime in Beijing.
“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said. “I told our steel workers I have their backs, and I meant it.”
Biden has described himself as the most pro-union president in US history and is banking on the support of organised labour in November. US Steel’s shares were down almost 2.5 per cent in late-morning trading on Thursday, having fallen by more than 12 per cent on Wednesday.
Biden’s intervention comes a day after the Financial Times first reported that he was preparing to voice concerns about the Japanese group’s proposed acquisition of the Pennsylvania-based steelmaker.
Nippon Steel last week formally filed the deal with the Committee on Foreign Investment in the US, the inter-agency panel that vets inbound deals for national security threats. The intervention by Biden raises questions about how Cfius will proceed in its investigation.
The intervention comes less than a month before Fumio Kishida, the Japanese prime minister who has worked closely with Biden to shore up Asian allies in the face of Chinese threats, is due to arrive in Washington for a high-profile visit.
The move caps months of debate within the White House about how to respond to a deal that has sparked a political backlash in Washington and Pennsylvania, a critical swing state.
Trump, who has also courted union workers in Pennsylvania and in other big industrial states, last month vowed to “absolutely” block the Nippon Steel deal if elected to another term in the White House.
“I would block it instantaneously. Absolutely,” he told reporters after meeting last month with the International Brotherhood of Teamsters, one of the largest US labour unions. Trump said it was a “horrible thing” that US Steel might be sold to a foreign entity.
“We saved the steel industry, now US Steel is being bought by Japan,” Trump added. “It’s so terrible.”
The United Steelworkers union, which is based in Pittsburgh, has long opposed the takeover.
Bob Casey, the Democratic US senator from Pennsylvania who is also facing a tough bid for re-election in November, immediately welcomed Biden’s statement, saying: “Pennsylvania workers are the American steel industry’s greatest asset.”
Casey said he had “long held concerns that this sale could be a bad deal for our workers.”
Casey, who is likely to go head-to-head in November against Republican candidate and former Bridgewater executive David McCormick, added his “number one priority” was “protecting union jobs”, adding: “I’ll work like hell against any deal that leaves our steelworkers behind.”
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