US Steel’s merger with its Japanese rival is facing uncertainties due to presidential politics, with the national security review of the deal expected to be delayed until after the election. The Committee on Foreign Investment in the United States is set to make its recommendation to the White House after November 5 to avoid the influence of the election cycle on the decision-making process. US Steel’s share price rose significantly after reports that President Joe Biden may not immediately block the deal. Biden, as the sitting president, has the authority to make the final decision on the deal and had indicated that he might block it if a consensus is not reached within the committee.
The potential consequences of blocking the deal have been highlighted by US Steel, which warned of possible layoffs and mill closures without Nippon’s support. Biden’s upcoming meeting with the Japanese prime minister adds another layer of complexity to the situation, as trade relations between the two countries may be affected by the outcome of the merger. Business groups have raised concerns about the politicization of the national security review process, emphasizing the importance of considering national security risks objectively without political interference.
Vice President Kamala Harris and former President Donald Trump, along with other politicians, have expressed their opposition to the sale of US Steel to Nippon, advocating for the company to remain American-owned and operated. US Steel had put itself up for sale in 2023 following a takeover offer from Cleveland Cliffs, leading to the $14.9 billion deal with Nippon Steel. The White House has emphasized the importance of US Steel remaining domestically owned and operated but is awaiting the committee’s recommendation before taking action.
Pennsylvania Governor Josh Shapiro has been actively involved in discussions surrounding the deal, advocating for responsible decision-making and emphasizing the impact on workers in Western Pennsylvania. The delay in the national security review process has raised concerns about the potential outcomes and the role of politics in influencing the decision-making process. The merger between US Steel and its Japanese rival continues to be a topic of debate and scrutiny, with the final decision expected to have significant implications for the steel industry and US-Japan relations.
