There’s renewed uncertainty over U.S. Steel’s future after President Biden decided to block Nippon Steel’s acquisition bid, worth over $14 billion, citing national security. Cleveland-Cliffs, which tried and failed to acquire U.S. Steel in 2023, now sees a new opening to take over the century-old company.

In a Monday press conference, Goncalves said he was prepared to offer a new bid for U.S. Steel. But he also unloaded fierce criticism of Japan, a U.S. ally. “China is bad, China is evil, China is horrible, but Japan is worse, Japan is a lot worse,” he said. 

“Japan is evil. Japan taught China a lot of things.” Goncalves said. “Japan taught China how to dump, how to have overcapacity, how to overproduce.”

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Nippon Steel first entered China in 1977, helping to set up the country’s first modern steel mill. It established a joint venture with Baosteel, a member of the China Baowu Steel Group, in 2004. 

Baowu is now the world’s largest steelmaker, according to the World Steel Organization. Six of the top 10 steel producers are Chinese companies. 

Nippon Steel ended its joint venture with Baosteel last year, citing difficulties in the Chinese market and a wish to focus investment on the U.S. and India. 

‘You did not learn how good we are’

On Monday, Goncalves also accused Japan of not appreciating U.S. support after the Second World War. 

“You did not learn anything since 1945,” he said. “You did not learn how good we are, how gracious we are, how magnanimous we are, how forgiving we are.”

The U.S. helped rebuild Japan’s economy in the wake of the latter’s defeat in the Second World War. It also provides additional security to Japan through a defense treaty which allows the U.S. to establish bases in the country.

Yet Washington also lobbied the Japanese government to voluntarily limit exports of goods like semiconductors and cars to help protect U.S. companies. 

Japanese politicians have reacted to the Biden administration’s decision to block the deal with confusion. “It is unfortunately true that there are concerns being raised within Japan’s industrial world over future Japan-U.S. investment,” Prime Minister Shigeru Ishiba said in early January. 

Tokyo did not react to Goncalves’s criticism when asked by reporters. “The government would like to refrain from commenting on every single statement made by the management of single companies,” Chief Cabinet Secretary Yoshimasa Hayashi said.

Nippon Steel, U.S. Steel and Cleveland-Cliffs

Cleveland-Cliffs made a bid for U.S. Steel in 2023, proposing to buy the company for about $7.25 billion. Yet U.S. Steel was worried that a deal with Cleveland-Cliffs, another U.S. company, could trigger antitrust concerns. 

U.S. Steel rejected the bid, calling it “unreasonable”; Nippon Steel later offered to buy the company for over $14 billion.

In an interview with CNBC on Monday, Goncalves suggested that he was still interested in buying U.S. Steel. “I have an all-American solution in place,” he said. The outlet previously reported that Cleveland-Cliffs will partner with Nucor, another U.S.-based steel producer, on a joint bid.

Nippon Steel’s bid for U.S. Steel caused a political firestorm during last year’s U.S. presidential election, with both Biden and Trump pledging to block the deal. 

Both Nippon Steel and U.S Steel are now suing the U.S. government over its decision to block the deal, and are asking a federal appeals court to overturn Biden’s decision. The suit alleges that the review by the Committee on Foreign Investments in the United States (CFIUS) was prejudiced by Biden’s longstanding opposition to the deal, thus denying the deal a fair assessment.

Nippon Steel and U.S. Steel are also suing Cleveland-Cliffs and the United Steelworkers union, accusing both of colluding to kill the acquisition. 

Goncalves, in a statement, has called the lawsuit a “shameless effort to scapegoat others” for a “self-inflicted disaster.”