With just days left to close a once-in-a-lifetime deal, Takahiro Mori flew in a rented jet between meetings with some of Washington’s most powerful officials and staged a sit-in with steel workers in the Rust Belt. was arranged in a hurry.
U.S. authorities have until Monday to decide whether to allow his company, Nippon Steel, to complete its $15 billion acquisition of U.S. Steel. U.S. Steel is an iconic Pittsburgh-based company founded in the early 20th century as American industry was coming of age.
Mori’s charm offensive took several months. But the chances of success are fading.
U.S. officials, who are expected to issue a ruling on the deal by Dec. 23, are divided, meaning the final decision could fall to President Joe Biden, who It has already said it opposes the Japanese company’s bid. The same goes for President-elect Donald Trump.
At stake are jobs across America’s Rust Belt and reliance on deep-pocketed foreign companies such as Nippon Steel, whether through the kind of protectionism that Biden and Trump campaigned on this year. How does the US government think it can maintain jobs?
The results will also send a signal internationally about whether the United States, long the most important overseas market for Japanese companies, will still welcome foreign investment from allies in Europe and East Asia. This comes as President Trump has vowed to provide incentives to encourage companies to invest in the United States.
Even in the Mon Valley region around Pittsburgh, where Nippon Steel has focused its campaign on hearts and minds and where U.S. Steel has warned of job losses if the deal is blocked, prominent voices are skeptical. .
The most prominent opponent of the deal is the United Steelworkers union and its president, Dave McCall, who remains a fierce critic despite pleas from Mori and steel executives on both coasts of the Pacific.
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In an interview at the stately Pittsburgh union headquarters, McCall said Japan needs to ensure jobs are protected, but Japanese companies are cutting back on U.S. factories to ship cheaper foreign steel. I suspected that it was.
“I think they will eventually quit,” McCall said. “They will be able to harvest our assets, our blast furnace assets, and import products into the United States from that excess production capacity (in Japan and other countries where they produce).”
Japan denies this, instead detailing how it will spend $2.7 billion on new U.S. production capacity in Gary and Mon Valley, Indiana. In the valley town of Clairton, steelworkers are being bombarded with radio and TV ads and glossy flyers touting Nippon Steel’s promised investments and jobs.
“You’re trying to watch football and then another Nippon commercial comes on,” said Don Furco, former president of USW Local 1557 in Clairton.
Furko said he and his colleagues were also “categorically opposed” to the deal.
“People are worried about their pensions, and they also think the United States should make its own steel,” he added. “This is not xenophobic, this is patriotic.”
These concerns are echoed in Washington as well. A decision this weekend will end a corporate battle that has become a political test of the election, particularly in the battleground state of Pennsylvania.
Japan’s biggest hurdle remains Cfius, the federal interagency commission that assesses the national security impact of foreign acquisitions. Unless the committee unanimously greenlights the deal, it will be up to Biden to approve or veto it.
The U.S. Treasury Department, which chairs the Cfius Committee, sent a letter over the weekend to attorneys representing Nippon Steel and U.S. Steel outlining the committee’s concerns about the deal.
Among the concerns raised in the ministry’s 29-page letter, obtained by the FT, are concerns that Japanese companies could reduce U.S. domestic steel production capacity in the future, forcing the U.S. to rely too heavily on imports. It included the possibility of making a decision.
At least three of the Cfius agencies, including the Treasury Department, the Department of Defense, and the State Department, have concluded that there is no national security risk in acquiring the iconic American steelmaker. U.S. Trade Representative Katherine Tai is also among those opposed to the deal, according to people familiar with the negotiations.
Whatever the Biden administration decides, its impact will ripple from Washington to Tokyo and signal the U.S. stance on protectionism even before President Trump took office with promises to raise tariffs. .
Supporters of the deal say there are many jobs waiting closer to home.
U.S. Steel President David Barritt warned in September that the company would close some plants and move its headquarters from Pittsburgh if the merger with Japan falls through.
“Here in the Mon Valley, if this deal doesn’t happen, it’s a ticking time bomb,” said Jack Maskill, vice president of USW Local 2227 in West Mifflin, southeast of Pittsburgh.
The chapter’s president, Jason Zugay, said most local union members support the deal as an opportunity to save jobs and secure factories and steel facilities.
Mr. Zugay, a Biden supporter, was given the opportunity to lobby Mr. Trump during a photo shoot in Pittsburgh on the eve of the November election.
“I brought my 12-year-old daughter with me to increase my chances of being talked to while taking pictures,” Zugai said. “I said to him, ‘You said you wanted foreign investment, but you said you wanted to protect jobs. Now you can have both.'”
“I asked him not to say at this rally that he brought all the steelworkers to see that he was breaking the deal,” Zugai said. “And he didn’t say it. He didn’t say anything for weeks.”
In early December, President Trump, who will replace Biden in the White House on January 20, posted on Truth Social that he would block the deal.
Mr. McCall has denied ever meeting or speaking with Mr. Trump. “We sent him a letter saying we know there are a lot of issues, but we think we can work together and we want to start a dialogue,” McCall said.
“For us, it’s about our members, it’s about their job security, their financial security, their retirement security,” McCall said. “So whoever supports that policy, we support them.”
