Investing.com -- A group of US lawmakers who support unions is urging President Joe Biden to strongly reject the proposed acquisition of United States Steel Corp (BVMF:USSX34). by Nippon Steel Corp. They argue that the deal could pose a serious threat to the future of American steel manufacturing.
The Congressional Labor Caucus sent a letter to the President, raising their concerns and adding to the pressure on Biden to stop the deal, which was announced a year ago. The letter, dated Tuesday, was signed by 29 US lawmakers, including Ohio Representative Marcy Kaptur and Pennsylvania Democrat Chris Deluzio. The letter highlights widespread concerns within the labor movement, a group that has traditionally had close ties with the Democratic Party.
Biden is expected to officially block the $14.1 billion sale of US Steel to Nippon Steel on national security grounds, once it is referred back to him later this month, according to individuals familiar with the situation. The Committee on Foreign Investment in the United States has spent much of the year reviewing the deal and must present its decision to Biden by December 22 or 23. Biden has publicly expressed his support for the labor movement and has actively sought the endorsement of union leaders and members.
The lawmakers' letter criticizes Nippon Steel for not providing any legally binding commitments in writing, despite its public statements and verbal assurances that it plans to invest billions of dollars in US steel manufacturing and will not transfer any related jobs outside of the US. The letter urges Biden to reject the merger by the end of the Committee on Foreign Investment's third 90-day review period, which concludes on December 22, 2024.
However, not all of Biden's allies agree with this stance. Three prominent Black House Democrats sent a letter to Biden on December 12 expressing their support for the deal. They believe that Nippon Steel's commitment to invest in the steel industry will stimulate several manufacturing sectors that are crucial for job creation and economic stability, especially for Black Americans and their communities.
The letter was signed by lawmakers Maxine Waters (NYSE:WAT), Jim Clyburn, and Bennie Thompson. Clyburn, in particular, is a close ally of the president. His endorsement was crucial in reviving Biden's primary campaign ahead of the 2020 election, which ultimately led to Biden's election to the presidency. The lawmakers urged the Biden administration to work with all stakeholders to ensure the successful completion of the acquisition.
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