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"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Three US senators have expressed concern regarding Nippon Steel’s business connections in China, marking a new setback for the Japanese group in its attempts to acquire US Steel.
Senator Sherrod Brown, a Democrat from Ohio who chairs the Senate banking committee, has urged President Joe Biden to investigate Nippon’s business dealings in China, as revealed in a letter obtained by the Financial Times.
Citing a report by Horizon Advisory, a consultancy, Senator Brown expressed concerns about Nippon’s market exposure and operations in China, which the report suggested posed a significant national security risk.
In his letter, Senator Brown emphasized the necessity for the Biden administration to thoroughly scrutinize Nippon’s involvement with the Chinese steel industry over four decades.
Senator Brown forwarded the Horizon report to President Biden and received support from two other senators representing industrial states: Ohio Republican JD Vance and Pennsylvania Democrat Bob Casey, the Financial Times reported.
Referring to China’s military-civil fusion strategy, which mandates domestic entities to share technological advancements with the military, Senator Brown highlighted the worrisome implications of Nippon’s ties to the Chinese steel ecosystem and industrial policy agenda in its pursuit of global economic dominance.
Nippon Steel has agreed to buy US Steel for roughly $15 billion but the deal faces an uphill battle to approval during a US election year.
Biden said in February that US Steel should remain domestically owned. His opponent in the November presidential vote, former President Donald Trump, has promised to block the deal if he is re-elected.
Japan’s largest steelmaker has pledged no job cuts as a result of the deal, to honour all agreements between the union and US Steel as well as to move its own US headquarters to Pittsburgh, where US Steel is based.
(With files from Reuters)
