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Nippon Steel warns Trump: Tariffs won’t boost US steel industry

As Japan’s Nippon Steel scrambles to persuade the incoming US administration, led by Donald Trump, to reconsider its controversial $15 billion acquisition of US Steel, the company’s chairman and CEO has issued an important warning: Tariffs alone won’t boost the US steel industry.

In his first public appearance since US President Joe Biden blocked the deal last week, Hashimoto held a press conference in Tokyo, where he stressed that the proposed merger between the two companies would serve US national security interests. He stressed that the merger would result in a stronger, more competitive industrial entity in the global market.

Hashimoto left no doubt about the economic convictions of the company he represents, stating: “We are absolutely confident that there is no better option than this deal to boost the US steel industry.”

He added, stressing that “tariffs alone, no matter how high, will not be able to make this industry stronger and more resilient.”

These statements were not just ideas, but came after a new legal escalation, as Nippon Steel and US Steel filed two lawsuits in US courts, accusing Biden’s decision to block the deal of being “illegal interference” in the affairs of the two companies.

Hashimoto’s statements are particularly significant, as they are directly directed at President Donald Trump, who has expressed his strong opposition to the sale of US Steel, especially as he prepares to introduce a new package of protectionist policies for the steel sector.

Trump wrote on the Truth Social platform: “Why sell US Steel now, when the expected tariffs will significantly increase the company’s profits and market value?”

The current discussions revolve around a fundamental question: Will the acquisition of US Steel by a Japanese company, despite Japan being a strategic ally of the United States, weaken the local industry and threaten its production capabilities? Or will the benefit of Japanese capital and advanced technological expertise lead to the opposite, which is strengthening US national security?

According to the presidential order issued by Biden, the two companies must “completely and irrevocably” abandon the proposed acquisition deal within 30 days, but the order allowed for an extension of this period if the Committee on Foreign Investment in the United States approves.

Legal experts have indicated that the two companies may seek a US court order to prevent the implementation of the specified time limit.

Eiji Hashimoto called on the Committee on Foreign Investment in the United States, a federal body that includes representatives from several government agencies and is responsible for examining foreign investments, to re-evaluate the deal through a new national security review under the Trump administration, after it failed to reach a consensus on the security risks of the deal.

He explained that the aim of filing this lawsuit is to force the relevant parties to accept his demands and obtain a new opportunity to review his investments, especially after the change of the US administration in the White House. He pointed out that this case is different in nature from traditional lawsuits.

US President Joe Biden’s decision to block this deal has raised doubts about Washington’s credibility in supporting its declared policy of economic cooperation with allied countries. This policy, known as the “support friends” policy, aims to build new supply networks in cooperation with friendly countries, as an alternative to relying on China and Russia, whether within the United States or in other allied countries.

In this context, Anthony Raba, a prominent legal expert who is the co-chair of the International Trade Department at Blank Room Law Firm, explained that this case is of particular importance, as it will determine the extent of the powers enjoyed by the US executive authority in reviewing foreign investments.

Legal sources revealed that “Nippon Steel” and “US Steel” have filed two lawsuits. The first lawsuit targets Biden’s decision itself, as it demands its cancellation on the basis of the existence of illegal political interference in the foreign investment review procedures.

The second lawsuit targets steel competitors, specifically Cleveland-Cliffs and its CEO, Lourenco Goncalves, as well as David McCall, president of the United Steelworkers union, whom the companies accuse of colluding and engaging in illegal, coordinated activities to prevent the acquisition.

David Plotinsky, a partner at law firm Morgan Lewis, called Nippon Steel and U.S. Steel’s legal challenge to CFIUS’s actions an “uphill battle,” citing the broad concept of national security in U.S. law.

But Plotinsky added that “some of the facts in this case pose a real challenge to the U.S. government.”

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