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Senator Raises Concerns About Nippon Steel's Possible China, Forced Labor Ties

Sen. Sherrod Brown, D-Ohio, who has opposed the proposed acquisition of U.S. Steel Corp. by Japan-based Nippon Steel Corp. since it was announced in December (see 2312200056), said April 2 that a new report about Nippon Steel’s ties to China provides another reason for the Biden administration to reject the deal.

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In an April 1 letter to President Joe Biden, Brown said the report, written by consulting firm Horizon Advisory, shows Nippon Steel has a “pervasive” presence in China’s steel sector, including operating nine facilities in whole or in part in China. Brown is also concerned that the report indicates Nippon Steel may be linked to forced labor of China's Uyghur minority and may be partnering with an entity that meets the definition of a Chinese military company.

“As you examine this deal, I urge you to thoroughly investigate the allegations raised in this report and examine Nippon’s ties to the Chinese government and the danger this merger poses to American national and economic security,” Brown told Biden. He said the report "raises serious concerns about several matters," including "possible violations of the [Uyghur] Forced Labor Protection Act."

In a statement, Nippon Steel said the report is “rife with inaccuracies and misrepresentations” and that its China operations account for less than 5% of its global production capacity. It also said the acquisition would help U.S. Steel better compete with China by providing access to Nippon Steel's "significant investment" and "world-leading advanced technology."

Biden announced in mid-March that he intends to oppose the acquisition, saying the "iconic" American steelmaker should remain in U.S. hands (see 2403140049). Nippon Steel responded by saying it has no plans to cancel the $14.9 billion deal, which has been undergoing regulatory review (see 2403150066).