US bipartisan agreement is thwarting Japan’s Nippon Steel from purchasing US Steel. President Joe Biden and former President Donald Trump are against the proposed $14.1 billion deal, which was initially introduced in December of last year. 

Nippon Steel remains steadfast in its attempt to salvage the offer, citing broader benefits to US steel union workers should the sale be approved. The Japanese giant claims there would be no plant closures nor layoffs due to the purchase and would even move its US headquarters to Pittsburgh (US Steel headquarters) should the sale go through.   

US Steel was once known as the “arsenal of democracy” during World War II. Founded by Andrew Carnegie, J.P. Morgan, and Charles Schwab, among other prominent industrialists, the past steel colossus was revered worldwide until the deindustrialization of the Rust Belt. By the mid-1980s, American steel production only produced 10% of the world’s steel, down from 40% in the mid-1950s.

A 2021 Congressional Research Service report found that steel plays a vital role in critical infrastructure projects, missile systems, and overall defense. Politically, practically no issues achieve bipartisan support in 2024, yet protecting the steel industry is one. Key swing states such as Ohio, Pennsylvania, and Minnesota employ tens of thousands of steelworkers, and both candidates are vying for their support. 

While Japan is a trusted US ally, Nippon’s nine facilities in China have caught the eye of Democrats and Republicans alike. Between 2001 and 2013, Nippon added facilities to its portfolio amidst aggressive Chinese steel demand. American steel producers remember the period as a time when China would dump excess metal stateside and globally, leading to cratering prices and the unprofitability of several US companies. 

The proposed deal is now in the hands of the Committee on Foreign Investment in the US (CFIUS). CFIUS is tasked with assessing national security concerns, and the US Treasury Department entity is already warning against increased politicization with the proposed sale. 

Should China not be part of Nippon’s portfolio, the US domestic manufacturing issue could likely be resolved. However, in an election year where middle-class families feel the inflationary pinch and Chinese influence has been deemed a national security concern, the deal will remain hotly contested and a politicized issue for CFIUS to wrestle with.