Setting off a chain reaction in these actions would put the $15 billion deal of U.S. Steel by Nippon Steel right on the desk of President Joe Biden-a place where his administration may soon make an unexpected decision which promises to reorder the U.S. Steel industry and says at least something about its national security.
The deal has been in review for several months. Lawmakers, industry analysts, and unions fear that this move will have long-lasting effects on American jobs and productive capacity, plus adverse impacts on economic interests.
The deal by the Japanese steel giant to buy one of the biggest U.S. steel producers is considered one of the boldest gambits in the global steel market. Critics, on the other hand, view the deal as threatening jobs, cutting competition, and weakening the U.S. steelmaking base.
There are also national security concerns, given the strategic importance of the industry for defense and infrastructure.
Possible Economic and National Security Implications
The deal review by the Biden administration reflects a wider unease about how foreign ownership in critical industries impinges on economic stability and security. US Steel’s raw materials can be traced in everything from defense and infrastructure, with lawmakers who are leery about letting such a vital sector take foreign influence.
Labor unions have strongly led opposition from steelworkers from all over the country, saying that this takeover could bring in outsourcing and a weakening in protection for the workers; it might focus on profit that could send their jobs overseas. One of the largest contingents of U.S. Ssteellaborers in the industry is concerned about the many livelihoods this deal will be touching.
What’s at stake for U.S. Steel and Nippon Steel?
For U.S. Steel, the deal presents at least the promise of a growth opportunity and entrance into global markets.
Still to be determined is whether the acquisition would leave U.S. Steel in an advantageous or disadvantageous position with regard to competing in global markets.
Nippon Steel, for its part, claims the acquisition would serve to streamline operations and provide innovation impetus to U.S. Steel, making it competitive.
The company has further promised to invest billions of dollars in U.S. steel operations, though critics remain skeptical about the long-term benefits for American workers.
But as President Biden weighs the decision, it remains to be seen how he will rule on the deal: approving the deal, seeking modifications to it, or blocking it wholesale.
