US President Joe Biden intends to express concern over Nippon Steel's proposed $14.9 billion acquisition of US Steel, according to a source familiar with the matter. This news has caused a nearly 13% drop in US Steel's stock as investors speculate about potential political opposition to the deal.
The issue has the potential to cast a shadow over the April 10 summit between Biden and Japanese Prime Minister Fumio Kishida. The summit aims to strengthen the longstanding security alliance between the US and Japan, especially in response to increasing Chinese influence.
In December, Nippon Steel secured a deal to acquire the iconic 122-year-old US steelmaker, expecting it to benefit from the infrastructure bill proposed by Biden. However, the deal has faced criticism from both Democratic and Republican senators, citing national security concerns and questioning the lack of consultation with US Steel's main union before the announcement.
Former President Donald Trump has also expressed opposition to the acquisition, stating that he would block it if elected. The White House, echoing concerns about national security, emphasized the need for thorough scrutiny of the deal due to US Steel's critical role in producing materials vital for national security.
While the White House declined to comment, sources suggest that Biden will issue a statement regarding the acquisition before Kishida's state visit. This move has been privately communicated to the Japanese government.
The potential ramifications of this issue could overshadow the summit and pose challenges for Kishida, who is already facing political difficulties at home, according to Matthew Goodman, an expert on trade and economics at the Council on Foreign Relations think tank in Washington.
