Former Secretary of State Mike Pompeo defended the proposed $14 billion deal for Nippon Steel to acquire U.S. Steel and urged President-elect Donald Trump to support the deal ahead of President Biden’s decision to block the acquisition.
On Friday, Biden announced that he would block the deal on national security grounds, saying in a statement that a “strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
Pompeo, who Nippon Steel hired last year to advise on the deal, said in an appearance Thursday on FOX Business Network’s “Kudlow” prior to the White House decision that, “Unfortunately, that committee that was responsible for evaluating national security risks became politicized.”
“Instead of just looking at national security risks, of course there’s none – it’s an ally, Japan, that’s going to invest in America, make steel here in America, build in America,” Pompeo said.
PRESIDENT BIDEN TO BLOCK SALE OF US STEEL TO NIPPON STEEL
Pompeo added that while he hoped Biden would allow the deal to go forward, if the White House were to block the deal that he hoped that the incoming Trump administration, which has also expressed opposition to the deal, would “reconsider for the workers of Pennsylvania, who nearly all favor this transaction moving forward, everybody but the senior union liberal leadership… It’s good for the community and the Mon Valley.”
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| X | UNITED STATES STEEL CORP. | 30.59 | -2.01 | -6.17% |
| NPSCY | NIPPON STEEL CORP. | 6.9767 | +0.01 | +0.10% |
The president’s decision comes after U.S. Steel CEO David Burritt warned that if the firm’s acquisition by Nippon Steel fell through, the company would likely close steel mills in Pennsylvania’s Monongahela Valley and Gary, Indiana, that had been slated to receive a multibillion-dollar upgrade with cash infused by Nippon following the completion of the sale.
“We wouldn’t do that if the deal falls through,” Burritt told The Wall Street Journal in an interview. “I don’t have the money.”
NIPPON STEEL HIRES FORMER TRUMP OFFICIAL MIKE POMPEO TO ADVISE ON US STEEL ACQUISITION
Nippon Steel pledged to invest $2.7 billion in U.S. Steel’s Mon Valley Works and the Gary Works as part of a modernization project aimed at making the facilities more competitive with international rivals. Nippon also said it would preserve the name, brand and headquarters of U.S. Steel and refrain from layoffs through 2026 had the deal gone through.
Burritt also signaled that if the Mon Valley Works closes, the company would likely look to move its headquarters out of Pittsburgh to a location in the South, where an increasingly large share of the company’s production has moved.
Nippon Steel and U.S. Steel said in a joint statement that they are “dismayed by President Biden’s decision to block Nippon Steel’s acquisition of U.S. Steel, which reflects a clear violation of due process and the law governing CFIUS.”
“Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda. The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision,” the companies said, adding they “are left with no choice but to take all appropriate action to protect our legal rights.”
US STEEL CEO SAYS COMPANY LIKELY TO CLOSE STEEL MILLS IF PROPOSED $14B SALE TO NIPPON STEEL FALLS THROUGH
The United Steelworkers union (USW), which has long opposed the deal, released a statement saying that its “first and only concern has been the long-term viability of our facilities as we look to ensure a strong domestic steel industry well into the future.”
“We’re grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers,” USW added. “Moving forward, we’re confident that with responsible management, U.S. Steel will continue to support good jobs, healthy communities and robust national and economic security well into the future.”
The U.S. Chamber of Commerce criticized the Biden administration for politicizing the proposed deal and said in a statement that steelworkers’ “livelihoods are threatened” by the decision to block the deal.
“The Biden administration’s politicization of Nippon Steel’s acquisition of U.S. Steel threatens to impose a high economic cost on the American people in the years ahead,” said John Murphy, senior vice president and head of international at the U.S. Chamber of Commerce. “The first detrimental impacts will likely be felt by steelworkers – in Pennsylvania, Indiana, and other states – whose livelihoods are threatened by this decision.”
“The decision also could have a chilling effect on international investment in America. The investment of our important and reliable ally, Japan, supports nearly one million American jobs alone. The business community will continue to work to facilitate investments from abroad that help grow our economy and support American families,” Murphy said.
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