The new owner of U.S. Steel has deep and dangerous ties

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Many Americans were shocked when U.S. Steel announced it would be sold to the Japanese company Nippon Steel, workers were shocked.

The sale of one of America’s largest companies to a foreign-based conglomerate may hurt Americans’ pride, but it also raises national security concerns.

Now some Senators have revealed that the Japanese-owned steel company has some very deep and dangerous connections to one of America’s biggest enemies.

Nippon Steel has ties to the Chinese Communist Party

Executives with U.S. Steel and Nippon Steel Corporation announced a $15 billion deal that would sell the American company to Japan’s largest steelmaker in December 2023.

The massive deal is important because Pittsburgh-based U.S. Steel played a vital role in America’s “Arsenal of Democracy” during World War II, which saw Allied powers defeat the Axis, including Imperial Japan.

But now, Senators Sherrod Brown (D-OH), Bob Casey (D-PA), and J.D. Vance (R-OH) are sounding the alarm over Nippon Steel’s ties to China, citing a report from the firm Horizon Advisory.

The report states, “In addition to market dependence on China, Nipon directly owns operations in the country. Those operations risk sharing technology and production expertise with the PRC’s industrial base.”

“Nippon has a long-run history supporting the establishment and foundation of the Chinese steel industry; PRC discourse about industrial modernization has referred to the Japanese conglomerate as a ‘master.” Nippon is also looked to by Chinese peers as a critical source of strategic guidance for maturing the operations of what has grown into the world’s dominant steel industry,” it continued.

The report also emphasized that the relationship between the two “brings Nippon into close and frequent interaction with China’s steel industry. Nippon maintains active joint ventures with a range of Chinese state-backed steel champions. In addition to those partnerships, Nippon also works with more niche Chinese champions intended to accelerate up various industrial and engineering value chains.”

One of the most concerning portions of the report states, “Nippon’s variety of partners in China may risk providing those emergent players access to leading international technology.”

In a letter to President Biden, Senator Brown wrote, “Nippon’s connections to the Chinese steel ecosystem and industrial policy agenda [have] concerning implications regarding ties to China’s military-civil fusion strategy and quest for global economic power.”

The connections are “troubling”

Senator Bob Casey told the Financial Times that the company’s “deep ties to the Chinese Communist Party are troubling, and its relationship with the CCP must be scrutinized as it pursues an acquisition of U.S. Steel.”

Senator Vance asked Biden to block the deal, telling the Financial Times, “This foreign takeover of U.S. Steel poses significant security risks. We cannot allow one of the largest American steelmakers to be gobbled up by a foreign entity with ties to the Chinese Communist Party and its military-industrial apparatus. The president must find the courage to do what’s right and block this deal without delay.”

Biden claims to oppose the acquisition.

Michael Stumo with the Coalition for a Prosperous America emphasized, “It is critical that his statement of opposition results in action.”

U.S. Steel was founded in 1901 by Andrew Carnegie, J.P. Morgan, and Charles Schwab, helping the state of Pennsylvania to become the nation’s steel capital.

Informed American will keep you up-to-date on any developments to this ongoing story.