Trump vows to block Japanese steelmaker from buying US Steel, pledges tax incentives and tariffs

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This article was published 03/12/2024 (309 days ago), so information in it may no longer be current.

HARRISBURG, Pa. (AP) — President-elect Donald Trump is underscoring his intention to block the purchase of U.S. Steel by Japanese steelmaker Nippon Steel Corp., and he’s pledging to use tax incentives and tariffs to strengthen the iconic American steelmaker.

Trump had vowed early in the presidential campaign that he would “instantaneously” block the deal, and he reiterated that sentiment in a post on his Truth Social platform on Monday night.

“I am totally against the once great and powerful U.S. Steel being bought by a foreign company” and will use tax incentives and tariffs to make U.S. Steel “Strong and Great Again, and it will happen FAST!” he wrote.

“As President,” he continued, “I will block this deal from happening. Buyer Beware!!!”

President Joe Biden, like Trump, also opposes Nippon Steel’s purchase of Pittsburgh-based U.S. Steel. Biden’s White House in September said that it had yet to see a report from the secretive Committee on Foreign Investment in the United States, which was reviewing the transaction for national security concerns. The committee, which is chaired by the treasury secretary and includes other Cabinet members, can recommend that the president block a transaction, and federal law gives the president that power.

Ahead of the November election, the proposed merger carried political importance in Pennsylvania, a critical swing state that Trump eventually won. Biden publicly sided with the United Steelworkers, the labor union, in seeking to reject the deal.

When he announced his opposition in a March statement, Biden said: “U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”

Nippon Steel has said it is the only company that can make the necessary investment in U.S. Steel’s factories and strengthen the American steel industry. Both Nippon Steel and U.S. Steel on Tuesday released statements in support of the acquisition.

“This transaction should be approved on its merits. The benefits are overwhelmingly clear. Our communities, customers, investors, and employees strongly support this transaction, and we will continue to advocate for them and adherence to the rule of law,” U.S. Steel said.

The deal follows a long stretch of protectionist U.S. tariffs that analysts say has helped reinvigorate domestic steel, including U.S. Steel. U.S. Steel’s shareholders have approved the deal, but the United Steelworkers oppose it.

In a statement Tuesday, the union said the deal carries “serious long-term implications for U.S. economic and national security.”

“It’s clear that President Trump understands the vital role a strong domestic steel industry plays in our national security, as well as the importance of the jobs and communities the industry supports,” the union said.

The deal has drawn bipartisan opposition in the U.S. Senate, including from the incoming vice president, Republican Sen. JD Vance of Ohio, although the federal government’s objections to the deal have drawn criticism that the opposition is political.

Some U.S. Steel workers would prefer Nippon Steel acquire the company, given that it appears to have a better financial balance sheet than another potential buyer, Cleveland-Cliffs.

U.S. Steel “provided a very, very good life for our families for a lot of years,” said Jack Maskil, a vice president at the Steelworkers local branch in West Mifflin, Pennsylvania. “And we feel that with the Nippon deal that a lot more families for futures to come will be able to share the same.”

West Mifflin Mayor Chris Kelly said he met with Nippon Steel executives and found himself satisfied by their commitments. Located southeast of Pittsburgh, West Mifflin is home to U.S. Steel’s Mon Valley Works–Irvin Plant.

“There’s no question in my mind that it’s the best deal moving forward,” Kelly said at a panel hosted on Tuesday by the conservative think tank Hudson Institute, where Maskil was also speaking.

The Biden administration committee vetting the merger is scheduled later this month to decide on the acquisition or possibly extend the ongoing review.

William Chou, a deputy director at the Hudson Institute specializing in relations with Japan, said that “President-elect Trump’s view on the deal are important.” But given the upcoming deadline, “It’s up to President Biden to recognize how this deal will advance the interests of future generations of U.S. Steel union steelworkers.”

Trump’s statement came two weeks after Nippon Steel’s vice chairman, Takahiro Mori, visited Pittsburgh and Washington to meet with lawmakers, local officials and workers in an ongoing persuasion campaign.

That campaign has included Nippon Steel’s promises to boost its capital commitments beyond the original deal and, more recently, a pledge that it won’t import steel slabs that would compete with U.S. Steel’s blast furnaces.

As part of its proposed $14.9 billion purchase of U.S. Steel, Nippon Steel also pledged to invest at least $1.4 billion in USW-represented facilities, not to conduct layoffs or plant closings during the term of the basic labor agreement, and to protect the best interests of U.S. Steel in trade matters.

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Boak reported from Washington.