Potential Title: Potential Government Scrutiny Looms Over US Steel Sale to Japanese Rival, Says US Commerce Secretary
US Commerce Secretary Gina Raimondo suggests that the potential sale of US Steel to a Japanese rival steelmaker might encounter government scrutiny, potentially hindering the acquisition
"The potential acquisition of US Steel by a Japanese rival steelmaker may receive resistance from the US government," stated US Commerce Secretary Gina Raimondo. "President Biden is dedicated to ensuring a strong steel industry in the United States for national security reasons," she added in an interview with CNBC on Thursday.
Raimondo refrained from addressing the US Steel and Nippon Steel's $14.1 billion acquisition deal directly. However, she expressed the need to thoroughly scrutinize any foreign acquisition of an American steel company to safeguard the US steel industry, production, and workers.
US Steel, once the most valuable company in the world, saw a decline in business as the nation's economy transitioned from manufacturing to services. The 122-year-old company's revenue of $21 billion last year is approximately the same as what Walmart brings in every two weeks.
The Edgar Thomson Plant, operated by United States Steel Corp, is located in Braddock, Pennsylvania. In 2016, Trump's narrow victory in Pennsylvania broke a long winning streak for Democratic presidential candidates in the state. The current Democratic Presidential candidate, Joe Biden, is leading the president in Pennsylvania by 4.3 percentage points, according to RealClearPolitics' average of recent polls. (Image credit: Justin Merriman/Bloomberg/Getty Images)
US Steel, formerly a symbol of America's economic prowess, is now set to be acquired by a Japanese competitor, marking a significant shift in the company's status. US Steel CEO David Burritt expressed optimism about the acquisition, stating that it will benefit the United States by ensuring a competitive domestic steel industry and bolstering the company's global presence.
Despite the decline in revenue for US Steel, the deal has sparked criticism from both the steel industry and US lawmakers. The United Steelworkers union has announced plans to petition regulators to prevent the sale of US Steel to a foreign company, labeling the deal as "greedy" and "shortsighted."
United Steelworkers union President David McCall expressed disappointment, stating, "We were open to working with US Steel to maintain domestic ownership, but it chose to disregard the concerns of its loyal workforce and sell to a foreign-owned company." Rhode Island Governor Gina Raimondo also raised similar concerns, emphasizing that the US government cannot support any deal that would undermine American workers or the steel industry.
Other government officials, including Ohio Republican Senator J.D. Vance, have also expressed doubt about the deal since it was announced on Monday. Senator Vance has urged US Steel to turn down the foreign entity's takeover offer, citing the steel industry's involvement in military equipment production.
Today, a vital element of the American defense industrial base was sold to foreign entities in exchange for money," stated Senator John Fetterman on Monday. As a former mayor of Braddock, Pennsylvania, where one of US Steel's original plants is still in operation, the Democratic Senator pledged to take action to prevent the sale.
"Steel is crucial for our national and economic security, and I am dedicated to using my influence to oppose this foreign sale," stated Fetterman, emphasizing the importance of protecting our steel communities. Additionally, one of US Steel's domestic competitors has also voiced their opposition to the deal.
"It is crucial to maintain our production within the United States," emphasized Lourenco C. Goncalves, CEO of Cleveland-Cliffs, an American iron and steel company. "We cannot afford foreign ownership or the potential loss of American jobs due to foreign companies taking over."
Cleveland-Cliffs had made a previous offer to acquire US Steel, and Goncalves confirmed that his company continues to be interested in pursuing a deal.
- CNNs Chris Isidore contributed to reporting.
