Outgoing President Joe Biden abandoned a bomb when he published an executive decree last month, blocking the purchase of United States Steel (USS) by Nippon Steel in Japan, citing national security problems.
The decision triggered a wave of vituperative exchanges between Japanese Steel and Cleveland-Cliffs, whose anterior supply broke out in favor of the more generous offer of Japanese society. Japanese Steel has since continued the United States government and, separately, Cleveland-Cliffs and the United Steelworkers, saying that Biden’s decision was politically motivated and that Cleveland-Cliffs and the Union made the collus to kill the agreement.
Cleveland-cliffs retaliated. In a press conference without restraint shortly after the announcement of Biden, Lourenco Goncalves, CEO and president, said that the company was still interested in buying USS, would have in collaboration with Rival Nucor – an “American solution” – Before lacing in Japan as “bad”.
Adding to the drama, Ancora Holdings, an asset manager based in Cleveland, acquired a participation in US Steel and appointed a list of administrators and a CEO candidate who advocates keeping the legendary independent company and improving his profitability . The USS replied that “Ancora’s interests are not aligned with all American steel shareholders”.
Japanese Steel, for his part, remains attached to the agreement. President Donald Trump could also have his say.
“The Trump administration is in no way linked by the executive decrees that the previous administration has made,” explains Robert Friedman, partner at Holland & Knight in Washington, DC. If he wanted, said Friedman, Trump could cancel the order of Biden, allowing Us Steel and Japanese Steel to explore procedural options to persuade the Committee for Foreign Investments in the United States (CFIUS) to revisit his assessment national security issues.
Trump loudly opposed the Japanese-Wus attachment during the campaign. But the new president is known to change his mind frequently.
If Japanese Steel withdraws and Cleveland-Cliffs will rely on his file again, the agreement would cause anti-trust concerns. He could give Cleveland-Cliffs a dominant position in the integrated production of American steel, Kyle Lundin, principal consultant at Wood Mackenzie,.