US Commerce Secretary says US Steel sale to Japanese rival may face government scrutiny
By Samantha Delouya, CNN
(CNN) — US Steel’s potential acquisition by a Japanese rival steelmaker may face pushback by the US government, according to comments made by US Commerce Secretary Gina Raimondo.
“President Biden is so focused on making sure that we have a vibrant steel industry in the United States for national security purposes,” Raimondo said in an interview with CNBC that aired Thursday.
While Raimondo declined to directly weigh in on US Steel’s agreement to be bought by Japan’s largest steelmaker, Nippon Steel, for $14.1 billion, she said a deal in which a foreign company buys an American steelmaker would warrant further examination.
“I think it’s fair to say it would receive a good bit of scrutiny, because we have to protect the US steel industry, US production and US steel workers,” she said.
US Steel was once the most valuable company in the world, but as the nation’s economy shifted from manufacturing to services, the 122-year-old company’s business declined. US Steel’s revenue of $21 billion last year is roughly equivalent to what Walmart brings in every two weeks.
“We are confident that … this combination is truly best for all,” said US Steel CEO David Burritt on 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 revenue, the deal has faced backlash from both the steel industry and US lawmakers.
The United Steelworkers union said it would urge regulators to block the sale of US Steel to a foreign company, calling the deal “greedy” and “shortsighted.”
“We remained open throughout this process to working with US Steel to keep this iconic American company domestically owned and operated, but instead it chose to push aside the concerns of its dedicated workforce and sell to a foreign-owned company,” said United Steelworkers union President David McCall.
On Thursday, Raimondo echoed the union’s concerns, saying the US government “could not ever support any deal that would undermine US workers, the steelworker union, or the steelworker industry.”
Raimondo is not the only government official who has voiced skepticism since the deal was announced Monday.
Ohio Republican Senator J.D. Vance urged US Steel to reject a takeover bid from a foreign entity due to the steel industry’s role in producing military equipment.
“Today, a critical piece of America’s defense industrial base was auctioned off to foreigners for cash,” he said on Monday.
Pennsylvania Democratic Senator John Fetterman, who was previously mayor of Braddock, Pennsylvania, where one of US Steel’s first plants still operates, said he would work to block the transaction.
“Steel is always about security, both our national security and the economic security of our steel communities. I am committed to doing anything I can do, using my platform and my position, to block this foreign sale,” Fetterman said.
At least one of US Steel’s domestic competitors has spoken out against the deal, as well.
“It’s important to keep our production inside the United States,” Lourenco C. Goncalves, the CEO of Cleveland-Cliffs, and American iron and steel company, said. “We can’t allow for foreign ownership. We can’t allow for foreign companies to come over and liquidate American jobs.”
Cleveland-Cliffs previously bid to buy US Steel, and Goncalves said his company remains interested in a deal.
– CNN’s Chris Isidore contributed to reporting.
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