Nippon Steel sends Biden new US Steel proposal to win support: report

Nippon Steel said to offer a 10-year guarantee that it would not cut production capacity

By AFP

Published: Wed 1 Jan 2025, 5:19 PM

Nippon Steel has sent the White House a new proposal on US Steel, attempting to get the green light from President Joe Biden to acquire the American company, a US media report said Tuesday.

The proposition involves giving the US government a veto over reducing US Steel’s production capacity, reported The Washington Post.

Nippon Steel was said to offer a 10-year guarantee that it would not cut production capacity at US Steel’s mills in areas such as Pennsylvania, Indiana and Alabama without approval by a panel led by the Treasury Department.

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This came after the panel, known as the Committee on Foreign Investment in the United States (CFIUS), failed to reach a consensus on whether Nippon Steel’s acquisition of US Steel threatens Washington’s national security.

The impasse by CFIUS shifts the decision on the $14.9 billion transaction to the White House.

Biden faces an early January deadline for a final decision.

But the president has criticised the deal for months, joining a loud consensus of US power players who have slammed the transaction.

They include President-elect Donald Trump and the incoming vice president, JD Vance.

The deal became caught up in the 2024 US presidential campaign when Pennsylvania emerged as a critical swing state and leaders of the United Steelworkers union loudly opposed the transaction.

Nippon officials had hoped to have more success after the election, but there have been few signs that the dynamics have changed.

While the president has publicly opposed the deal, The Washington Post reported Tuesday that many of his advisers favor the transaction.

Biden could set conditions for the approval of the takeover, however, the news report said.

For example, this could involve Nippon Steel adhering to requirements like the preservation of US jobs, The Washington Post added.

It noted that sorting out the details could nudge the matter past Inauguration Day on January 20.

Nippon Steel did not immediately respond to a request for comment.

The latest proposal adds to Nippon Steel’s pledge to rule out layoffs or closures of unionised facilities for the period of the current union contract expiring in September 2026, the report added.

US media have previously reported that the killing of the deal could prompt litigation from the steel companies.

There are also questions about diplomatic fallout from derailing a transaction championed by Japan, a close US ally.