WASHINGTON — US Steel is an emblematic example of the lost manufacturing muscle that President Joseph R. Biden Jr. says his economic policies will bring back to the United States.
But last month, the famed but shrinking company announced plans to be acquired by a Japanese competitor. That development has put Biden in an awkward position as he tries to balance attempts to revitalize the country's industrial sector with his efforts to rebuild international alliances.
The Biden Administration is reviewing the proposed $14.1 billion takeover offer by Japan's Nippon Steel. The company is offering a hefty premium for US Steel, which has been weighing other takeover offers.
The proposal has become a high-profile example of the difficult policy decisions Biden faces as he seeks to revive American industry. one that could test the extent to which he is willing to wield presidential power in pursuit of what is arguably his primary economic goal: the creation and retention of good-paying union manufacturing jobs in the United States.
Biden is under pressure from the United Steelworkers union and populist senators from both parties who maintain that domestically owned steel production is critical to U.S. manufacturing and supply chains. They have warned that a foreign owner is more likely to move US Steel jobs and production overseas.
US Steel executives say the deal would benefit workers. Last month they announced that Nippon Steel had agreed to keep the company's headquarters in Pittsburgh, Pennsylvania, and honor the four-year collective bargaining agreement that the steelworkers union ratified in 2022.
Adding to the pressure on Biden: It's unclear what would happen to US Steel, founded 123 years ago, if the Administration halts the deal and whether doing so would ensure greater job security for the company's nearly 15,000 North American employees.
US Steel has faced decades of challenges due to growing foreign competition, particularly from China, which has flooded the global market with cheap, state-subsidized steel. American presidents have spent years trying to prop up and protect domestic steel makers through a combination of subsidies, import restrictions and so-called Buy America requirements for government purchases.
President Donald J. Trump imposed tariffs on imported steel, including from Japan. Biden has partially rolled back those taxes in an attempt to rebuild alliances. Biden also included strict Buy America provisions in new laws to invest in infrastructure, clean energy and other advanced manufacturing.
Those efforts have not come even close to recovering the levels of domestic steel production that the United States enjoyed in the 1970s.
Calls for an administrative review of the deal focused largely on the Committee on Foreign Investment in the United States (CFIUS), headed by Janet L. Yellen, the Treasury Secretary. The committee examines potential sales by U.S. companies to foreign companies for possible threats to national security and then issues recommendations to the President, who can suspend or block a deal.
In December, Biden appeared to grant the review request, although he stopped short of saying he would block it.
David McCall, president of United Steelworkers International, said Biden was “demonstrating once again the President's unwavering commitment to America's workers.”
Emily Kilcrease, a CFIUS expert and senior fellow at the Center for a New American Security, said CFIUS could require Nippon Steel to maintain certain levels of employment or production in the United States as a condition of the sale.
“I would be surprised if this deal was blocked,” he said.
By: JIM TANKERSLEY
BBC-NEWS-SRC: http://www.nytsyn.com/subscribed/stories/7071080, IMPORTING DATE: 2024-01-15 20:52:05
#sale #largest #companies #affect #Biden
