According to reports, as the resistance to the acquisition of United States steel increases, a senior executive from the Japanese steel company has been sent to Washington in an attempt to salvage this endangered trade. The Japanese side feels disappointed with the actions of the United States government, especially considering the pressure being exerted by the United States on Japan to cooperate in so-called security-related areas, such as preventing opponents from acquiring advanced semiconductors.
Caixin News Agency, September 11th (Reporter: Xia Junxiong) - According to media reports quoting sources, as the resistance to the acquisition of United States steel increases, a senior executive from the Japanese steel company has been sent to Washington in an attempt to salvage this endangered trade.
In December last year, Japan Steel announced plans to acquire United States Steel for $14.9 billion. This deal has faced strong opposition domestically in the United States and has been under investigation by the Committee on Foreign Investment in the United States (CFIUS) since last year. It was reported last week that President Biden is preparing to block the deal.
CFIUS is a cross-departmental government group led by the U.S. Department of the Treasury, primarily responsible for reviewing whether foreign investment transactions in the United States pose a national security risk.
Informed sources stated that on Wednesday local time, Motohiro Moritaka, Vice President of Japan Steel, met with several deputy cabinet ministers involved in CFIUS work in Washington. Motohiro Moritaka is also the chief negotiator for the United States Steel acquisition.
As the U.S. presidential election approaches, both Democratic and Republican presidential candidates have clearly expressed their opposition to Japan Steel's acquisition of the United States Steel in order to win over worker voters. The headquarters of United States Steel is located in Pittsburgh, Pennsylvania, which is one of the crucial swing states with significant influence on the U.S. election results.
Informed sources revealed that Japan Steel had attempted to withdraw the application submitted to CFIUS several weeks ago, intending to resubmit the application after the U.S. presidential election. The withdrawal of the application requires approval from CFIUS, but the group has not responded to Japan Steel.
If the acquisition of United States Steel is successful, Japan Steel is expected to become the world's second-largest steel producer. Japan Steel's quote is 40% higher than the stock price of United States Steel at the time of the announcement of the deal. The company's willingness to pay such a high premium is a bet that the 'Inflation Reduction Act' will promote the revival of American manufacturing.
The actions of the US government have disappointed Japan, especially considering that the US is pressuring Japan to cooperate in so-called security-related areas, such as preventing adversaries from obtaining advanced semiconductors.
Zack Cooper, an expert on Asia issues at the American Enterprise Institute, said, "The Biden administration frequently talks about the importance of unity with allies, but this decision (to block the US Steel acquisition) goes against those commitments. This should have been a case of supporting friendly countries with concrete actions, but instead, we have directly slapped the face of our best economic security partner."