Both U.S. Steel and the Japanese-owned Nippon Steel, which agreed to acquire the iconic American steel company, have poured record sums into lobbying as the deal faces political and regulatory hurdles. 

The $14.9 billion deal for the Japanese conglomerate to acquire U.S. Steel was announced in December 2023 but has taken much longer than originally anticipated due to bipartisan opposition. 

Former President Donald Trump reiterated his opposition to the merger in a speech Monday at a factory in Pennsylvania, the first stop in a tour of battleground states and the state where U.S. Steel is headquartered.

“I will stop Japan from buying United States Steel,” Trump said. “They shouldn’t be allowed to buy it.”

After Trump’s remarks, U.S. Steel released a statement emphasizing that it is “committed to the transaction with Nippon Steel,” calling the merger “the best deal for our employees, shareholders, communities, and customers.”

Both Trump and President Joe Biden have opposed the deal. Vice President Kamala Harris’ presidential campaign has not released an official statement on the proposed merger but Pennsylvania Gov. Josh Shapiro, a Democrat who made Harris’s VP shortlist before she selected Minnesota Gov. Tim Walz as her running mate, has been open about his opposition.

“I’ve been very clear that I’m not supporting any deal that the U.S. Steel workers don’t support,” Shapiro said at the Democratic National Convention in Chicago on Monday. “Nippon has a lot of work to do in order to get right with the Steelworkers, if they’re ever able to.”

Steel companies build up lobbying operations amid acquisition deal review

Nippon Steel had no registered U.S. lobbyists until the final quarter of 2023 but quickly built a roster of several high-profile advocates in Washington.

The Japanese steel company’s team features multiple “revolving door” officials including former Reps. Illeana Ros-Lehtinen (R-Fla.) and Filemon Vela (D-Texas) as well as former aides to Senate Majority Leader

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After spending $30,000 in the fourth quarter of 2023, Nippon Steel quickly ramped up its spending to nearly $1.1 million over the first half of this year with $830,000 of that in the most recent quarter. Disclosures indicate that the merger is the major focus of Nippon Steel’s lobbying efforts. 

U.S. Steel has also upped its lobbying spending during the merger review, paying more money to federal lobbyists in the first half of the year than it spent in total any year in the last decade.  

Established in 1901 by J.P. Morgan, U.S. Steel has become emblematic of the American steel industry and remains one of the largest steel companies in the country. 

The Pittsburgh-based company reported spending $1.7 million on federal lobbying during the first half of 2024, more than triple the $545,000 it spent during the same period last year, according to disclosure forms filed with the U.S. Senate.

The deal has also attracted the support of Autos Drive America, a trade association that represents the U.S. operations of international automakers that reported lobbying for approval of the acquisition. The National Taxpayers Union, a fiscally conservative taxpayer advocacy organization, has also reported lobbying on the deal and expressed support for its approval.

One of the biggest opponents of the deal is the United Steelworkers, or USW. The union claims the deal is a violation of the “successorship clause” in its labor agreement with U.S. Steel. 

In a video statement, the union’s president, David McCal, contended that U.S. Steel violated the agreement by “not having the ultimate parent sign on,” referencing the deal’s proposal to structure U.S. Steel under Nippon’s North American subsidiary.

A three-attorney panel will decide whether the company violated its labor agreement with the union in a closed-door arbitration hearing that kicked off last week in Philadelphia. 

U.S. Steel said in a statement that it plans to present “clear and compelling evidence that agreements with the USW have been met.”

The union’s political leverage could also be critical to the fate of the deal as presidential contenders compete for union voters in swing states ahead of November’s election.

The deal also remains under review by federal regulators including the Committee on Foreign Investment in the U.S., which is tasked with reviewing the national security implications of foreign investments in the U.S. economy. The committee’s reviews can ultimately end up on a president’s desk for a decision but the timeline is not public, leaving it unclear whether that would happen while Biden is in the White House or after the next president is inaugurated.