Japan's Persistence Navigating Challenges in U.S. Steel Agreement

06 Apr, 2024

Japan's Persistence Navigating Challenges in U.S. Steel Agreement

Days after U.S. President Joe Biden joined his election rival Donald Trump in voicing concern about a Japanese purchase of U.S. Steel, the manufacturer began touting the benefits of the deal on billboards near its factories from Alabama to Pennsylvania. The billboards may be the most public signs of what some Japanese officials say in private — that despite high hurdles, Nippon Steel could still steer through the fraught $15 billion acquisition of the iconic American manufacturer.

The deal may well hinge on whether regulators avoid election-year politics by clearing the acquisition after Nov. 5, and, critically, on whether Nippon Steel can win over the influential United Steelworkers (USW) labor union. Opposition from the Pittsburgh-based union has far-reaching implications in an election year where Pennsylvania is seen as a key battleground state.

Nevertheless, it is still premature to declare the deal dead, four senior Japanese officials speaking on condition of anonymity said — a view shared by some analysts, consultants and lawyers. Ongoing regulatory reviews in the United States may serve to buy time, thereby delaying a final decision until after the election when the campaign rhetoric has dissipated, the officials and others said.