Kamala Harris Opposes Nippon Steel’s Acquisition of U.S. Steel

Vice President Kamala Harris has voiced her strong opposition to the proposed acquisition of U.S. Steel by the Japanese firm Nippon Steel, asserting that the iconic American steel producer should remain under American ownership. During a campaign rally in Pittsburgh, she stated, “U.S. Steel should remain American-owned and American-operated,” a declaration that was met with enthusiastic applause from the crowd.

Since the announcement of Nippon Steel’s $15 billion bid in December, the proposal has faced significant backlash from various stakeholders, particularly the United Steelworkers union, which is headquartered in Pittsburgh. The union has raised concerns that allowing a foreign entity to acquire an American steel company could pose substantial risks to national security. Additionally, they have expressed skepticism regarding Nippon Steel’s commitments, including assurances against layoffs and plant closures.

Over the past several months, a bipartisan coalition of political leaders, including both President Joe Biden and former President Donald Trump, has echoed similar sentiments, indicating their disapproval of foreign ownership of U.S. Steel.

Union representatives and executives from Nippon Steel have been keenly observing Harris’s position on the matter. Following her remarks, the United Steelworkers union welcomed her stance, viewing it as a crucial step towards protecting both national security and American jobs.

Nippon Steel, on its part, has expressed confidence that the merger would ultimately benefit both U.S. Steel and the broader American steel industry. In a statement, they remarked, “We believe that a fair and objective regulatory review process will support this outcome.” The company is banking on the idea that discussions regarding the acquisition will extend beyond the upcoming presidential election in November, a time when they anticipate that unions may wield less political influence.

In the United States, the president possesses the authority to block specific cross-border transactions if they are deemed a threat to national security. The critical question surrounding this situation is whether a takeover led by Japan—a close ally of the United States—could be classified as such a threat.

Nippon Steel has gone to significant lengths to demonstrate that the acquisition would be beneficial not only for its own operations but also for the employees of U.S. Steel and the overall steel industry in both nations. The Japanese firm has pledged billions of dollars in investments aimed at enhancing U.S. Steel’s facilities. Furthermore, in July, they announced the withdrawal from a long-standing joint venture in China, a move that was intended to mitigate any concerns from U.S. regulators.

The national security implications of Nippon Steel’s proposal are currently under review by a powerful interagency panel known as the Committee on Foreign Investment in the United States (CFIUS). This committee is responsible for evaluating the potential risks associated with foreign investments. For cases that require a more thorough investigation, CFIUS will make recommendations to the president, who holds the ultimate decision-making power.

Reporting contributions by Nicholas Nehamas from Washington.