A few Senators from the nation’s Rust Belt are sounding the alarm over the ties between the Chinese Communist Party (CCP) and the Nippon Steel Corporation — the Japanese conglomerate looking to purchase the United States Steel Corporation.
In December of last year, executives with U.S. Steel and Nippon Steel Corporation announced a nearly $15 billion deal that would have the iconic American steel giant sold off to Japan’s largest steelmaker.
The deal is significant as U.S. Steel, based in Pittsburgh, Pennsylvania, played a critical role in the nation’s “Arsenal of Democracy” during World War II, which ultimately saw the Allied powers defeat the Axis, which included Imperial Japan.
This week, Sens. Sherrod Brown (D-OH), Bob Casey (D-PA), and J.D. Vance (R-OH) sounded the alarm to President Joe Biden’s administration over Nippon Steel’s ties to China. The Senators cite a report from the firm Horizon Advisory which details those ties:
In addition to market dependence on China, Nippon 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. [Emphasis added]
That relationship 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; Nippon’s variety of partners in China may risk providing those emergent players access to leading international technology. [Emphasis added]
“Nippon’s connection to the Chinese steel ecosystem and industrial policy agenda has concerning implications regarding ties to China’s military-civil fusion strategy and quest for global economic power,” Brown wrote in a letter to Biden, asking him to investigate the matter.
Meanwhile, Casey told the Financial Times that “Nippon Steel’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.”
Vance is asking Biden to block the acquisition altogether.
“The foreign takeover of US Steel poses significant national security risks,” Vance told the Financial Times:
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. [Emphasis added]
While Biden has said he opposes the acquisition, Michael Stumo with the Coalition for a Prosperous America said, “It is critical that his statement of opposition result in action.”
The sale of U.S. Steel, which was founded in 1901 by Andrew Carnegie, J.P. Morgan, and Charles Schwab, to Nippon is significant as the steelmaker served a critical role in the nation’s “Arsenal of Democracy” during WWII.
Among several American companies that helped the Allies defeat the Axis Powers, which included Imperial Japan, U.S. Steel made the U.S. the world’s largest steel producer during the war, with Pennsylvania becoming the nation’s steel capital.
John Binder is a reporter for Breitbart News. Email him at
