In a recent twist in the steel industry, former U.S. Secretary of State Mike Pompeo, who served under President Donald Trump, backs Nippon Steel Corp.’s ambitious $14.9 billion acquisition of United States Steel Corp. Pompeo believes this move is crucial in fortifying the U.S. against the economic influence of China in the steel market.
The Latest: In a compelling piece written for The Wall Street Journal, Pompeo, now offering his expertise as a strategic adviser to Nippon Steel, laid out the reasoning behind his endorsement. He emphasized that this acquisition could bolster U.S. national and economic security while safeguarding American steel jobs.
On the Radar: The proposed deal, however, isn’t without its hurdles. It’s facing resistance from heavyweights such as President Joe Biden and former President Trump. According to insiders cited by Bloomberg, Biden is anticipated to reject the merger, citing national security concerns, upon the expected referral from the Committee on Foreign Investment in the United States later this month.
Countering these apprehensions, Pompeo argues that turning down the acquisition could weaken America’s national security by reducing the country’s prowess in domestic steel production. He noted Nippon Steel’s promise to inject $2.7 billion into union-represented local steel facilities.
Meanwhile, Amanda Malkowski, a spokesperson for U.S. Steel, expressed confidence in the deal, insisting it should undergo approval based on its inherent advantages. Nippon Steel is also prepared to take legal steps if necessary, showing faith in the American judicial system.
Relevance: Why does all this matter? With the looming shadow of China’s steel overproduction, the implications on global supply are being watched closely. Biden has until late December to make his call on the matter, given the tight timeline from CFIUS. Share prices for U.S. Steel have been swinging as investors keep a close eye on the unfolding situation.
Adding to the political drama, just after his election triumph, Trump posted on Truth Social that he will not be extending invitations to both Nikki Haley and Mike Pompeo for roles in his forming administration.
The drama continues to unfold as the story develops, keeping industry watchers on the edge of their seats.
