Businesses warn Yellen on ‘political pressure’ over US Steel sale

Members of the Japan Business Federation joined US groups to pen the letter to Janet Yellen – Copyright AFP/File Richard A. Brooks

Major Japanese and American business groups have urged US Treasury Secretary Janet Yellen not to succumb to political pressure when reviewing Nippon Steel’s proposed acquisition of United States Steel.

The $14.9 billion takeover, agreed by the firms in December, has met opposition from both presidential candidates Kamala Harris and Donald Trump.

US Steel warned last week it could shut its Pennsylvania headquarters and factories if the deal is blocked, after reports said incumbent Joe Biden plans to stop the sale.

Yellen is chair of the Committee on Foreign Investment in the United States (CFIUS), which is reviewing the transaction.

The Japan Business Federation — the country’s largest business group — wrote to Yellen along with the United States Council for International Business, the Washington-based Global Business Alliance and others.

“There have been persistent attempts recently to politicise the committee’s work from across the political spectrum, allowing politics to undermine the clear and narrow statutory mandate of national security,” they said.

“We fear this political pressure may be unduly influencing the outcome of the CFIUS review” which is “putting the US economy and workers at risk”, warned the letter dated Wednesday and released to journalists on Thursday.

“America’s investment climate will be severely tarnished if such political interference prevails.”

Nippon Steel’s vice president met CFIUS members in Washington on Wednesday in an apparent attempt to win support for the acquisition, Japan’s Nikkei business daily and other media outlets said.

The takeover has been condemned by the United Steelworkers (USW) union, even as Nippon promised investments to keep Pennsylvania factories competitive and newer “mini mills” in the American South.

Wednesday’s letter noted that the United States is the world’s largest recipient of foreign direct investment.

Foreign-headquartered companies employ 7.9 million US workers, it said.

The letter also warned that American firms seeking to make investments abroad may face “reciprocal action as a result of politicising the US review process”.