U.S. Steel, established in 1901 by some of the largest magnates in our country's history, is about to fall into the hands of Japanese business owners.
Months ago, Donald Trump said he would block the sale, and now, Biden is making the same move in order to gain favor with unions.
Talking Points…
- Nisson Steel announces takeover bid
- Trump and Biden comment
- Analysis
In December 2023, a Japan-based company called Nisson Steel announced that it had offered a takeover bid of U.S. Steel. Nisson was offering an over-market price per share at the time, but it is now significantly over-market. The price per share offering was $55 per share, with U.S. Steel currently trading at $38.51. The 52-week high for U.S. Steel was $50.20.
When the deal was announced, President and Chief Executive Officer of U. S. Steel, David B. Burritt, stated:
"NSC has a proven track record of acquiring, operating, and investing in steel mill facilities globally – and we are confident that, like our strategy, this combination is truly Best for All. This transaction realizes the tremendous value today in our company and is the result of our Board of Directors' comprehensive and thorough strategic alternatives process. For our U. S. Steel employees, who I continue to be thankful for, the transaction combines like-minded steel companies with an unwavering focus on safety, shared goals, values, and strategies underpinned by rich histories. For customers, U. S. Steel and NSC create a truly global steel company with combined capabilities and innovation capable of meeting our customers' evolving needs.
"Today's announcement also benefits the United States – ensuring a competitive, domestic steel industry, while strengthening our presence globally. Our shared decarbonization focus is expected to enhance and accelerate our ability to provide customers with innovative steel solutions to meet sustainability goals."
Nisson executives have already stated that they "are committed to honoring all of U. S. Steel's existing union contracts," but there is still obvious concern about this impacting jobs here in the United States. With union money significantly impacting elections, Donald Trump immediately came out to say that if he were in office, he would block the deal. Trump stated:
"I would block it instantaneously. Absolutely.
"We saved the steel industry. Now, U.S. Steel is being bought by Japan. So terrible."
This got the attention of union members as well as some union heads. To this point, Democrats have always had the union support, but with this stance, Trump was trying to lure some of that campaign money out of Democrat pockets to his campaign. It took a few months, but Biden finally realized what Trump was doing here, then he suddenly chimed in, taking the same stance as Trump, stating:
"It is important that we maintain strong American steel companies powered by American steel workers.
"I told our steel workers I have their backs, and I meant it. U.S. 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."
United Steel Workers, who endorsed Biden in 2020, had also issued a statement on this matter back in February, squeezing Biden to make the same commitment that Trump had made, stating:
"It's essential that we continue to safeguard our domestic steelmaking capacity, and we appreciate the president's ongoing commitment to revitalizing our critical supply chains and rebuilding our nation's economic strength."
Japan's Prime Minister is scheduled to come to the United States for a state visit next month, and you better believe that this takeover will be top of mind when they sit down and talk to Joe Biden privately. This would surely be considered a snub by Japan, so this is very delicate waters for Joe Biden to be treading right now. He does not want to upset a major ally, but on the other hand, if he backs down, he could lose the support of not only the Steelworkers Union but other unions that could be impacted by this sale.
However, Joe Biden always goes with the money, so my best guess is that he will remain firm that a U.S. company must own U.S. Steel to keep the union money and support away from Donald Trump.
