Nippon Steel has pledged not to import steel from its international mills to the U.S. as part of its $14.9 billion acquisition of the United States Steel Corp, according to Takahiro Mori, Executive Vice President.
However, the timing appears to be unfavorable as the U.S. Commerce Department increased tariffs on Nippon Steel. The department imposed a dumping margin of 29% on Nippon Steel for selling hot-rolled steel in the U.S. at below market value.
The latest anti-import assurance from Mori came in a letter addressed to members of the United Steelworkers union, Reuters reported.
It comes after objections of union leaders, including United Steelworkers (USW) President David McCall, that the Japanese steelmaker may one day find it cheaper to import certain steel to the U.S. and replace some domestic output.
The letter also aims to address President Joe Biden's concerns around layoffs, with Mori assuring that there would be no layoffs during the takeover and reaffirmed plans to invest around $2.7 billion to upgrade U.S. Steel facilities nationwide.
"There is a lot of misinformation circulating about the Nippon Steel-U.S. Steel partnership and what it means for you," Mori wrote.
Further, the Japanese steelmaker committed to selling its stake in a U.S. steel plant joint venture if the acquisition is approved.
In September, an arbitration panel, jointly appointed by the company and the USW, approved the deal. However, the union disagreed with the outcome.
Mori mentioned that his offer to meet with union leadership in Pittsburgh has gone unanswered, but he is prepared to work "expeditiously and in good faith" once they agree to come to the negotiating table, according to a report on Transport Topics.
Nippon Steel's takeover has become controversial, with steelworkers now openly questioning McCall and other union leaders for opposing the takeover. Many rank-and-file members supports for the deal, citing the job security it promises.
But McCall's argument is there's no certainty the Japanese company will maintain union jobs in the long term and also raises doubts about whether the promised investments will live up to expectations.
Nippon is looking to finalize the acquisition, as the Committee on Foreign Investment in the United States (CFIUS) has extended its review process until the end of December. The company aims to complete the deal before President-elect Donald Trump, who had vowed to block the acquisition during his campaign, assumes office in January.
Meanwhile, the Commerce Department's 29% dumping margin on Nippon Steel for selling hot-rolled steel below fair market value in the U.S. from October 2022 to September 2023. This decision, made on November 13, is part of an annual review of a dumping case that dates back to 2016 when U.S. steelmakers first filed the complaint, according to BNN Bloomberg report.
The ruling was revealed on the same day that Nippon Steel made its promise to union workers regarding foreign imports. Though the two issues are different, the timing could provide union leaders like McCall an opportunity to criticize foreign ownership, while both companies continue to await a decision from CFIUS.
Mori is expected to meet steelworkers in Pittsburgh, during his U.S. visit next week.
