In a letter to President Biden, Senator Sherrod Brown, head of the Senate Banking Committee, urged a thorough examination of Nippon Steel‘s ties to the Chinese steel industry, citing national security concerns.
This comes amid bipartisan resistance in Congress to Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel Corp.
Brown referenced a report by Horizon Advisory, dated April, which raised alarm over Nippon Steel’s alleged connections to the Chinese government and the potential risks posed to American national and economic security.
Nippon Steel responded to the allegations, denouncing the Horizon report for its inaccuracies and misrepresentations. The company stated that its presence in China was minimal, accounting for less than 5% of its global production capacity.
However, Horizon’s report claimed that Nippon Steel has historical ties to the development of China’s steel industry and operates multiple facilities in China, often in partnership with state-backed enterprises.
Senator Brown emphasized the significance of Nippon Steel’s relationship with the Chinese steel ecosystem and its implications for China’s broader economic and military strategies.
He stressed the need for a comprehensive investigation into the merger’s potential impact, particularly in light of China’s military-civil fusion strategy and pursuit of global economic dominance.
Nippon Steel clarified that its Chinese investments do not influence its operations outside of China, and its Chinese partners do not have access to sensitive information about its global activities.
However, the White House considers the steel industry critical to national security, with President Biden expressing support for maintaining domestic ownership of U.S. Steel.
Former President Trump, Biden’s election opponent, has vowed to block the Nippon Steel deal if he returns to office.
