international observation | the blockage of nippon steel's acquisition of us steel highlights the interference of us political factors in the market
2024-09-15
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xinhua news agency, tokyo/washington, september 15title: nippon steel's acquisition of us steel is blocked, highlighting the interference of us political factors in the market
xinhua news agency reporter liu chunyan and xiong maoling
japanese media reported that executives of japanese steel giant nippon steel corporation (nippon steel) recently went to the united states to meet with senior us officials to save nippon steel's plan to acquire united states steel (us steel). earlier, there were reports that us president biden would block the acquisition on the grounds of "national security."
in december last year, nippon steel announced plans to spend 2 trillion yen (14.9 billion u.s. dollars) to acquire u.s. steel, but the acquisition plan was strongly opposed by the united steelworkers and the democratic and republican parties in the united states. democratic and republican presidential candidates harris and trump also expressed opposition to the deal.
analysts pointed out that in the context of the us election, the us government blocked the acquisition plan to cater to voters. this once again proves that in the dictionary of american politicians, there are no market rules, no alliance partners, only "election first".
this live video footage shot at the philadelphia presidential debate media center on september 10 shows u.s. vice president and democratic presidential candidate harris (right) and former u.s. president and republican presidential candidate trump participating in a televised debate in philadelphia. photo by xinhua news agency reporter li rui
acquisition plans thwarted
according to the news announced in december last year, nippon steel plans to complete the acquisition of u.s. steel by september this year. in april this year, u.s. steel convened an extraordinary shareholders' meeting to approve the acquisition by nippon steel. the u.s. government review became the key to the success of the acquisition. on september 11, nippon steel vice chairman and vice president moritakahiro met with relevant personnel from the u.s. foreign investment committee in washington. the u.s. side told nippon steel that there were "security concerns" about the acquisition plan. it is reported that biden will order the suspension of the acquisition plan.
gary hufbauer, a senior fellow at the peterson institute for international economics in the united states, said in an interview with xinhua news agency that nippon steel's technology is superior to that of u.s. steel, so the acquisition will improve the latter's long-term development prospects and mean more jobs, and rejecting the deal will make everything come to naught.
u.s. steel ceo david burritt said in early september that if the deal fails, u.s. steel may close its headquarters and factory in pittsburgh, pennsylvania, which may jeopardize thousands of jobs, and may also move its headquarters out of the united states.
however, the united steelworkers union said that the deal was not notified to the american union in advance, which violated the cooperation agreement between the union and the company, so they doubted whether the acquired company would be able to fulfill the existing labor contract, including pensions, retiree insurance benefits and other issues. david mccall, president of the united steelworkers union, also said that for 200 years, pittsburgh has been proud of its steel manufacturing capabilities, but if the steel mill was suddenly owned by japan, "it would be bad for our community and bad for the united states... the steel in our cars, buildings and even food cans is related to national security."
has become a "political issue"
pennsylvania, where u.s. steel is headquartered, is a key swing state in this year's u.s. presidential election, and the votes of members of the united steelworkers are what both presidential candidates want to compete for. analysts pointed out that because the united steelworkers insisted on opposing it, the biden administration blocked the acquisition plan in order to cater to voters before the election to fight against trump, and it is unclear whether the deal can be finally completed.
in march this year, biden issued a statement clearly opposing the acquisition; trump also made it clear that if he wins the election, he will block the deal. on august 19, trump gave a speech in pennsylvania, reiterating that "he will prevent (us steel) from being bought by japan" and "will take back the manufacturing industry." on september 2, harris said at a campaign event in pittsburgh that us steel "should be owned and operated by the united states."
this is the pittsburgh steel bridge in the united states, photographed on september 25, 2009. pittsburgh is known as the "steel city" and "steel capital" of the united states. photo by xinhua news agency reporter zhang yan
tsuneo watanabe, a senior researcher at the sasakawa peace foundation, pointed out that the reason why the democratic party opposed the acquisition was actually because trump opposed it. with the election approaching, since trump has proposed a proposal that is in line with the opinions of the unions, the democratic party has no choice but to do the same. kyodo news of japan also published an article saying that harris and other democrats believe that winning the votes of union members is one of the keys to defeating trump, so they want to tap into this vote bank in the sprint stage of the election.
hufbauer said the bipartisan opposition showed that both parties believed that retaining american ownership of an iconic company in a swing state could win some votes. "this decision does not make sense from an economic perspective, but it could have political consequences in a close election."
the nihon keizai shimbun said the acquisition has now become a "political issue" in the united states and is expected to be deadlocked before the presidential election in november.
abuse of "national security"
analysts pointed out that the blocking of the acquisition case shows that both parties and politicians in the united states follow the principle of "votes first". the united states has done countless things under the banner of "national security" to suppress other countries, even its allies: forcing japan to sign the "plaza accord" in the 1980s, launching "301 investigations" against japan to attack its semiconductor industry, or forcing general electric to acquire its main power business through a so-called "judicial investigation" against alstom in france...
recently, the japan business federation and some american business groups jointly wrote a letter to u.s. treasury secretary and chairman of the committee on foreign investment janet yellen, expressing concerns about "political interference" in the review of acquisition plans, saying that the review "puts the u.s. economy and workers at risk" and "should not become a policy under the guise of national security."
some candidates who are participating in the election of the new president of japan's ruling liberal democratic party have also expressed their views on the matter. shigeru ishiba, a former japanese defense minister and one of the popular candidates for the election, said that the us's remarks trying to block the acquisition were disturbing and "may undermine trust between japan and the united states." another candidate, japanese digital minister taro kono, said that he "never thought" that the acquisition would cause "national security" concerns, and that "improving productivity and efficiency through corporate acquisitions is beneficial to both buyers and sellers, and the government should not deliberately interfere."
an article on the website of the u.s. think tank council on foreign relations said that the biden administration has been seeking to enhance economic ties with u.s. allies, but critics believe that biden's opposition to u.s. companies merging with a japanese company has raised questions about washington's commitment to its allies and its openness to foreign investment.
