WASHINGTON: US President-elect Donald Trump on Monday said he would “block” a planned takeover of US Steel by Japanese company Nippon Steel, a deal worth $14.9 billion including debts. “I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump wrote on his Truth Social platform. “Through a series of Tax Incentives and Tariffs, we will make US Steel Strong and Great Again, and it will happen FAST! As President, I will block this deal from happening.”

Embattled US Steel has argued that it needs the Nippon deal to ensure sufficient investment in its Mon Valley plants in Pennsylvania, which it says it may have to shutter if the sale is blocked.

Nippon Steel said after Trump’s comments that it was “determined to protect and grow US Steel in a manner that reinforces American industry, domestic supply chain resiliency, and US national security.” “We will invest no less than $2.7 billion into its unionized facilities, introduce our world-class technological innovation, and secure union jobs so that American steelworkers at US Steel can manufacture the most advanced steel products for American customers,” the Japanese firm said in a statement.

Days after the US election last month, Nippon Steel said it expected to close its takeover of the company before the end of the year, while US President Joe Biden was still in office. Biden, too, has opposed the deal, saying it was “vital” for US Steel “to remain an American steel company that is domestically owned and operated.” The deal is being reviewed by a body helmed by Treasury Secretary Janet Yellen that audits foreign takeovers of US firms, called the Committee on Foreign Investment in the United States (CFIUS).

In September, Biden’s administration extended their review, pushing a conclusion on the politically sensitive deal until after the November 5 presidential election. A Nippon Steel earnings presentation on November 7 maintained that “the transaction is expected to close in... calendar year 2024” pending a US national security review. “Unless the situation changes dramatically, I believe the conclusion will come by the end of the year,” during Biden’s time in office, vice chairman Takahiro Mori told reporters. Trump will be inaugurated on January 20.

Protectionist policies

On the campaign trail, he vowed to install protectionist economic policies to help support US businesses, including threats to restart a trade war with the world’s second largest economy, China. While running for the White House, he specifically promised to block Nippon’s takeover of US Steel, which is based in the key political battleground state of Pennsylvania. Trump’s vice presidential pick JD Vance also led congressional opposition to the takeover in the US Senate, where the deal has been criticized by both Republicans and Democrats.

Analysts had suggested Trump’s position could soften after the election was over, but Monday’s statement indicated that was not the case. Major Japanese and American business groups have urged Yellen not to succumb to political pressure when reviewing the proposed acquisition. The steelworkers union has fought the deal, and criticized a September arbitrators’ ruling that Nippon had proven it could assume US Steel’s labor contract obligations. In September, however, some US Steel workers rallied in support of the deal, arguing it would help keep plants open. — AFP