 IntroductionUS President Joe Biden spoke out against Japan’s Nippon Steel take over of US steel on March 14, 2024. Said Biden:“US Steel has been an iconic American 

US President Joe Biden spoke out against Japan’s Nippon Steel take over of US steel on March 14, 2024. Said 

“US 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," 

Opposition to takeover of US Steel by Nippon Steel

The Japanese company’s proposal, announced in December, to take over American steel has been opposed fervently not just by the United Steel workers (USW) union but also several US policymakers – both Democrats and Republicans.

 Biden and former US President, Donald Trump, who will be facing each other in the presidential election later this year are on the same page on this issue. Trump has categorically stated, that if he were to take over as president, he would “block the deal”. While commenting on the deal White House National Economic Adviser Lael Brainard said that Biden 

“…the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”

First, those opposing the deal argue that domestic steel production is essential from a security point of view and the take over can not be de-hyphenated from US' security interests.

Second, neither Biden nor Trump can afford to annoy the steel unions. While Trump had won the 2016 election due to his support in the rust belt (parts of Mid-Western and South Eastern America which have experienced a decline in industrial activity) from workers, Biden’s 2020 win was also attributed to his performance in the rust belt.

Third, this clearly reiterates a change in economic narrative within the US. While for many, Biden has not been as inward looking as Trump on several economic issues, even he cannot afford to go against the overall economic consensus – even if it concerns close allies of the US -- on certain sensitive issues. It is not just the Nippon Steel issue, but the democrats and republicans have been on the same page on the Trans Pacific Partnership (TPP) – now CPTPP (Comprehensive and Progressive agreement for Trans Pacific Partnership). The TPP was a brain-child of former President, Barack Obama and US pulled out from the agreement during Donald Trump’s presidency. It is not just Republicans however, but several democrats who have been sceptical regarding the TPP.

Nippon Steel on its part has said that it would go ahead with the deal and ensure no layoffs, or plant closures till September 2026. Japan is a close ally of the US and in recent years both countries have been working closely in the Indo-Pacific (Japan is part of the Quad) on strategic issues as well as diversification of supply chains. In April 2024, Japanese PM Kishida will also be visiting the US.  During the Trump presidency as well differences between Washington and Tokyo over economic issues – especially the imposition of tariffs by Trump had emerged as major irritants.

In conclusion, close strategic ties are no longer a guarantee of convergence over important economic issues – especially issues like the take over of US steel. Within the US, there is also an unwritten consensus between the Democrats and Republicans not just on foreign policy issues, but economic issues as well.

Opposition to Nippon steel take over of US steel: Bi-partisan consensus within US?

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