US President, Joe Biden, is reportedly making preparations to oppose the sale of American steel manufacturer, Cleveland-Cliffs, to Japan’s Nippon Steel Corporation. The move, which marks a significant departure from his predecessor’s patterns of governance, is intended as a protective measure for American industry, an approach increasingly prioritized in broader government economic strategies.
The planned acquisition, estimated around $1.5 billion, would not be an isolated incident, as Japan’s Nippon Steel Corporation is well-known for its aggressive international expansion strategy. Japanese steel corporations have been buying up American companies at an accelerating rate, ostensibly to diversify their businesses and lower the risks associated with dependence on the domestic Japanese market.
However, Biden’s forthcoming intervention is backed by a philosophy of protecting and prioritizing American industry, a movement growing in strength and significance amid concerns about outsourcing, job losses, and dwindling domestic manufacturing capabilities.
Biden’s administration has been adamant about protecting American businesses and jobs, pivoting away from the previous administration’s pro-business measures that often favoured multinational corporations. Notably, Biden has pledged to implement a ‘Made in America’ plan, which includes a commitment to direct a significant portion of federal procurement – the purchase of goods and services for government operations – to American businesses.
Opposing the sale of Cleveland-Cliffs also aligns with Biden’s plans to revive the American steel industry, which he views as integral to achieving ambitious infrastructure plans set out during his election campaign. These proposed plans aim to modernize American transportation and clean energy infrastructure, which would rely heavily on steel to develop. By keeping this significant steel producer under American control, Biden aims to ensure steady domestic supply and protect American jobs in this vital sector.
Furthermore, the government’s decision to block the Japanese acquisition is part of a broader stance on foreign investment, as there are ongoing concerns about foreign ownership of strategic industrials and critical national infrastructure.
To ensure the protection of strategic industries, the Committee on Foreign Investment in the United States (CFIUS), a government panel that scrutinises foreign acquisitions for potential national security risks, will likely review the proposed acquisition. CFIUS has the power to recommend the President block transactions that may pose a threat to national security.
While Biden’s move to block the sale of Cleveland-Cliffs signals proactive efforts to protect American industry, it is not void of potential complications. It might induce negative reactions from Japan and other international partners, potentially affecting diplomatic relations and global trade dynamics.
In conclusion, Biden’s move to block the sale of Cleveland-Cliffs to Japan’s Nippon Steel Corporation is an embodiment of his administration’s commitment to protecting and revitalizing American industries. Though this move may raise diplomatic and trading concerns, it underscores the extent to which Biden is intensifying efforts to secure American industrial bases, boost domestic job markets, and build a more resilient economy.