Nippon Steel Corporation (Nippon Steel), the world's fourth-largest steelmaker, recently announced plans to buy the 122-year-old U.S. Steel Corporation for more than $14 billion, turning it into a wholly-owned subsidiary.
Screenshot of Nikkei Asia's report
U.S. Steel welcomed the acquisition.
Its chief executive, David Burritt, told investors: "This deal is good for the United States. In addition, we can work with one of America's most important allies to promote America's competitiveness in the market. ”
However, the White House said it may launch a "serious review" of the acquisition from a "security" perspective.
This undoubtedly adds uncertainty to the above-mentioned transaction.
Screenshot of the report of the US "Capitol Hill".
This "bet" is a bit hanging
Founded in 1901 and headquartered in Pittsburgh, Pennsylvania, U.S. Steel was the first company in U.S. history to exceed $1 billion in market capitalization and is an iconic company in the United States.
The first 20 years of the last century were the golden age of U.S. Steel. But after its heyday, the company went from bad to worse, ranking only 27th in the global steel industry last year.
According to Reuters, Nippon Steel intends to make a cash purchase of U.S. Steel for $55 per share, for a total of about $14.9 billion.
Screenshot of the Reuters report
Sure enough, some US politicians immediately became deeply sour and reflexively expressed their "heartbreak" at the acquisition of American companies by foreign companies.
In the words of Kim Ward, the Republican leader of the Pennsylvania Senate, "They [Nippon Steel] are foreign companies, and we are going to work with the members of the U.S. Congress to keep U.S. Steel." This is Pittsburgh, our steel capital."
Kim Ward
However, the motivation for opposing the takeover is clearly not as simple as "keeping pride".
It is reported that the acquisition of U.S. Steel will make Nippon Steel one of the largest suppliers to the U.S. automotive industry, and will also give the Japanese company access to special steel for making electric vehicles in the United States.
And this is simply intolerable in the United States, which is practicing "America First" protectionism.
A few days ago, three Republican senators sent a letter to Janet Yellen, the US Treasury Secretary and chairman of the Committee on Foreign Investment, warning that Nippon Steel's acquisition of U.S. Steel "will have a terrible impact on the U.S. industrial base" and calling for the deal to be blocked on the grounds of "national security".
Screenshot of Japan's "Yomiuri Shimbun" report
Since then, Brainard, director of the White House National Economic Council, issued a statement on the 21st stressing that the White House believes that U.S. Steel is still the core of domestic steel production in the United States and is vital to national security.
"Even acquisitions by close allies deserve serious scrutiny in terms of security and impact on supply chains. ”
Screenshot of the official website of the White House
Nippon Steel is said to have been confident in the acquisition, betting that the U.S. steel industry would benefit from a series of fiscal stimulus bills introduced by the U.S. government, thereby generating potential profits for itself.
But is this idea really reliable?
The European Union, which is also an ally of the United States, may be able to provide Japan with a "lesson from the past".
It is most dangerous to be an ally of the United States
Since the end of 2021, the U.S. government has successively introduced three protectionist policies, including the Bipartisan Infrastructure Act, the CHIPS and Science Act, and the Inflation Reduction Act, focusing on the industrial chain and supply chain of advantageous industries and related fields of the emerging economy, trying to use its own low energy costs and generous financial subsidies to return the advantageous manufacturing industry to the United States, which has long been hollowed out, so as to achieve the so-called "reindustrialization" and "employment security" of the United States.
The Wall Street Journal: EU competition chief called US legislation on energy subsidies "toxic" and said the EU is preparing a response.
Without respect for economic laws, the results of artificially manipulating the production and supply chain can be imagined.
After the introduction of the above bill, many European energy-intensive industrial companies have shifted their future investment focus to the United States, and Europe's own industrial hollowing out and economic recession have followed.
According to the latest forecast of the German Institute for Economic Research, Germany, Europe's largest economy, will fall into recession for the second consecutive year in 2024.
Screenshot of the report on the website of "Deutsche Welle".
After the White House made strong rhetoric on Nippon Steel's acquisition of U.S. Steel, some commentators pointed out that the U.S. steel industry has always been deeply rooted, and has long excluded steel made in other countries, and it is difficult for other countries' steel companies to enter the U.S. market.
And if the U.S. government finally halts Nippon Steel's acquisition of U.S. companies, it will contradict the U.S. strategy of "uniting allies and friendly countries to build supply chains."
Former U.S. Secretary of Commerce Wilbur Ross said in an interview with the U.S. media that it is completely nonsense to block the above transaction on the grounds of so-called "national security".
"I think they turned things upside down and there was no reason to object to [the deal]. I can't think of any reason to oppose it, other than xenophobia. ”
Screenshot of the Fox News report (Ross on the right)
The long-standing behavior of the United States has repeatedly shown that Washington's policy is nothing more than an immutable trick to politicize, weaponize, and instrumentalize trade issues, and that being an ally of the United States has always been the most dangerous.
As American radio host and political analyst Garland Nixon pointed out in an article, the historical record shows that "the United States will entrap everyone — friend or foe — for the benefit of its own corporations." That's how Washington behaves."
Screenshot of the report on the website of Russia Today TV