Trump says will ‘block’ Nippon Steel from taking over US Steel
Sign up now: Get ST's newsletters delivered to your inbox
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.
PHOTO: REUTERS
Follow topic:
WASHINGTON - US President-elect Donald Trump on Dec 2 said he would “block” a planned takeover of US Steel by Japanese company Nippon Steel, a deal worth US$14.9 billion (S$20 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.
Days after the US election in November, Nippon Steel said it expected to close its takeover of the company before the end of 2024, while US President Joe Biden was still in office.
Mr Biden, too, has opposed the deal,
The deal is being reviewed by a body helmed by Treasury Secretary Janet Yellen that audits foreign takeovers of US companies, called the Committee on Foreign Investment in the United States (CFIUS).
In September, Mr Biden’s administration extended their review, pushing a conclusion on the politically sensitive deal until after the Nov 5 presidential election.
Nippon, however, was confident it would close the deal by the end of 2024.
A Nippon Steel earnings presentation on Nov 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 Mr Biden’s time in office, vice-chairman Takahiro Mori told reporters.
Trump will be inaugurated on Jan 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 J.D. Vance also led congressional opposition to the takeover in the US Senate, where the deal has been criticised by both Republicans and Democrats.
Analysts had suggested Trump’s position could soften after the election was over, but the Dec 2 statement indicated that was not the case.
Major Japanese and American business groups have urged Ms Yellen not to succumb to political pressure when reviewing the proposed acquisition.
The steelworkers union has fought the deal, and criticised 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
