Senators Continue to Bash Nippon Buy of US Steel

the American market,” the senators wrote. “Given the clear and present threats that a Nippon Steel acquisition poses to American workers and a critical industry, we believe executive action to block this deal is urgent.”

In a letter to Treasury Secretary Janet Yellen, Commerce Secretary Gina Raimondo and
US Trade Representative Katherine Tai, the senators said that Nippon Steel’s well-documented record of dumping steel products in the United States presents a clear conflict with the government’s ability to continue defending the domestic steel industry.

Over the years, the International Trade Commission has issued numerous antidumping and countervailing duty orders against Japanese steel makers, including Nippon, the senators noted.

Nippon’s unfair trade practices “are particularly troubling for the American steel industry as Nippon Steel’s efforts to acquire US Steel threatens the future ability of domestic industry to seek relief through trade enforcement mechanisms available through the ITC,” the senators wrote.

“In every trade case against Japanese steel producers, the US Department of Commerce found that imports from Japan were dumped into the United States at unfair prices. In each one, the ITC found that the dumped imports from Japan had caused or threatened material injury to domestic producers,” they continued.

Impeding ITC Rulings
“Foreign steel companies, such as Nippon, seek to gain any advantage they can when competing

with the US and, as such, future ITC rulings could be impeded by the Nippon’s acquisition of US Steel,” according to the senators.

“This could happen in several ways. First, US Steel could refuse to participate in an investigation by declining to provide essential data supporting a case to the ITC. This interferes with the ITC’s ability to assess the full scale of damage being done to U.S. industry and can lead to results where damage is underestimated.

Second, US Steel could choose to exit a market with little explanation – limiting relief available. These concerns are not hypothetical as the ITC has documented how US Steel, once Nippon announced its plans to acquire it, changed its behavior in the tin mill suit.”

The senators argued that the ITC documented that US Steel declined to provide critical data and exited a market without explanation – actions that undermined the very suit U.S. Steel helped to bring.

“In this approach, Nippon could use US Steel’s status as an “American company” to undermine trade cases from the inside. In this role, U.S. Steel could oppose efforts to either sustain or bring new suits against Japanese steel makers, potentially granting foreign steelmakers unprecedented and unfettered access to the U.S. market.

Similarly, the Nippon-acquired US Steel could participate in trade suits but utilize the confidential questionnaire process to undermine the case brought by its American competitors in support of Nippon’s Japanese production or that of Nippon’s many foreign subsidiaries,” the senators wrote.