Askume WASHINGTON, Sept 9 – Nippon Steel (5401.T) said U.S. Steel Corp.The strongly worded letter, first published by Askume, said XN believed it would strengthen the US steel industry and that there were political factors behind US opposition to the deal.
Below is a summary of some of Nippon Steel’s key arguments in refuting the national security risks, as outlined by the Committee on Foreign Investment in the United States (CFIUS), first reported by Askume .
CFIUS calls Japan an ally
In its letter to the companies, the Committee on Foreign Investment in the United States described Japan as “a vital ally of the United States” and said the committee “considers the importance of our alliance to the national security of both countries.”
Nippon Steel and U.S. Steel respond
In response, the steel company called the statement “essentially a superficial commitment.” The companies said the committee “failed to seriously consider this fact and did not explain how it affected their risk analysis,” adding that CFIUS did not consider the US-Japan agreement, which “explicitly assumes that Japanese steel does not pose a threat to Japanese steel.” Risk”. US markets. “
The companies also claim that CFIUS “has never blocked an acquisition by a Japanese company before.”
CFIUS vs. India
CFIUS indicated that Nippon Steel may decide to shift US production to India, citing its presence and expansion in the country and relatively lower production costs.
“India is one of Nippon Steel’s largest production markets outside China,” CFIUS said, citing public reports that Nippon Steel plans to double its production capacity in India by 2030.
“A review of the total cost of steel production at US and Indian plants shows that costs in the US are significantly higher than in India,” the report said.
Nippon Steel and U.S. Steel respond
The companies said Nippon Steel’s expansion into India will not harm its presence in the United States. “India is a growing market for Nippon Steel, but this growth will not come at the expense of Nippon Steel’s commitment to the U.S. market,” they said.
“Simply put, Nippon Steel intends to invest in the United States, develop American steel, and serve the American market; Nippon Steel intends to invest in India, develop American steel, and serve the Indian market, consistent with India’s similar focus on developing the domestic steel industry,” he said.
CFIUS on Tariffs
CFIUS accused Nippon Steel of making “limited use of trade remedies,” measures designed to impose tariffs on foreign rivals, and sometimes resisting U.S. efforts to impose protective tariffs on steel imports. The committee said that suggested a potential acquisition of U.S. Steel could threaten its future bids for tariff relief, despite the U.S. company aggressively seeking tariffs.
“While U.S. steel companies frequently request (trade) relief, Nippon Steel is a foreign defendant opposing trade measures unjustly intended for the domestic U.S. steel industry,” CFIUS said.
Nippon Steel and U.S. Steel respond
“Nippon Steel’s claims of ‘limited use’ trade remedies are simply not true,” the companies responded, stressing that Nippon Steel is involved in two ongoing trade remedy procedures in Japan.
The steel companies argue that Nippon Steel recently asked the Japanese government to follow the United States and impose anti-dumping duties on Chinese steel exports to protect Japan’s domestic industry.
But to allay any doubts, Nippon Steel proposed in the letter that it maintain an internal “business committee” to ensure that decisions on business matters are made without interference from Nippon Steel.
