U.S. President Joe Biden’s administration is examining Nippon Steel’s connections to China, people familiar with the matter have said, in a potential stumbling block for the Japanese giant’s politically contentious deal to acquire American rival United States Steel.
The administration sees its priority as protecting U.S. industry and is worried about Nippon Steel’s exposure to China, the people said, speaking on condition of anonymity to discuss the thinking. Biden has maintained tariffs on Chinese goods implemented by former U.S. President Donald Trump under Section 301 of the trade law and may consider future tariffs on steel and aluminum from China, the people said.
The complication for Nippon Steel is that regulators may look unfavorably on whether its acquisition of U.S. Steel could allow more access to U.S. markets for Chinese-sourced steel, while the administration uses tariffs and other measures to keep steel from being dumped on the American market.