US Commerce Secretary says sale of US steel to Japanese rival could be subject to government review

Gene J. Puskar/AP

This is part of US Steel’s Edgar Thomson plant in Braddock, Pennsylvania, on Monday.

CNN –

The possible takeover of US Steel by a Japanese steel competitor could face resistance from the US government, according to comments from US Commerce Secretary Gina Raimondo.

“President Biden is very focused on ensuring that we have a vibrant steel industry in the United States for national security reasons,” Raimondo said in an interview with CNBC that aired Thursday.

While Raimondo declined to comment directly on US Steel’s agreement to buy Japan’s largest steelmaker Nippon Steel for $14.1 billion, she said a deal in which a foreign company buys an American steelmaker is one requires further examination.

“I think it’s fair to say it would be subject to scrutiny because we need to protect the U.S. steel industry, U.S. manufacturing and U.S. steelworkers,” she said.

US Steel was once the most valuable company in the world, but as the country’s economy shifted from manufacturing to services, the 122-year-old company’s business declined. US Steel’s $21 billion in sales last year is roughly equivalent to what Walmart brings in every two weeks.

“We are confident that … this combination is truly the best for everyone,” US Steel CEO David Burritt said Monday. “Today’s announcement also benefits the United States – ensuring a competitive domestic steel industry while strengthening our presence globally.”

Despite US Steel’s declining revenues, the deal was met with backlash from both the steel industry and US lawmakers.

The United Steelworkers union said it would urge regulators to block the sale of U.S. Steel to a foreign company, calling the deal “greedy” and “short-sighted.”

“We remained open throughout the process to working with US Steel to keep this iconic American company domestically owned and operated, but instead it chose to put aside the concerns of its dedicated workforce and move to a foreign-owned company “sell,” said United Steelworkers President David McCall.

On Thursday, Raimondo reiterated the union’s concerns, saying the U.S. government “could never support an agreement that would weaken U.S. workers, the steelworkers union or the steelworker industry.”

Raimondo is not the only administration official to have expressed skepticism since the deal was announced Monday.

Republican Senator JD Vance of Ohio called on US Steel to reject a takeover offer from a foreign company because of the steel industry’s role in producing military equipment.

“Today an important part of the American defense industry was auctioned off to foreigners for cash,” he said Monday.

Pennsylvania Democratic Sen. John Fetterman, who previously served as mayor of Braddock, Pennsylvania, where one of U.S. Steel’s first plants still operates, said he would work to block the deal.

“Steel is always about security, both our national security and the economic security of our steel communities. “I am committed to doing everything I can to prevent this foreign sale using my platform and position,” Fetterman said.

At least one of US Steel’s domestic competitors has also opposed the deal.

“It is important to keep our production in the United States,” said Lourenco C. Goncalves, CEO of Cleveland-Cliffs, an American iron and steel company. “We cannot allow foreign ownership. We cannot allow foreign companies to come along and eliminate American jobs.”

Cleveland-Cliffs had previously made a bid to buy US Steel, and Goncalves said his company remained interested in a deal.

– CNN’s Chris Isidore contributed reporting.


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