US Steel Stock Drops After VP Kamala Harris Urges American Ownership: Retail Hopes Nippon Deal Goes Through

Shares of United States Steel Corporation (X) were down over 4% in Tuesday’s pre-market session after vice president Kamala Harris reportedly said during a campaign stop in Pittsburgh that US Steel should remain domestically owned.

“The president mentioned it: US Steel is a historic American company, and it is vital for our nation to maintain strong American steel companies,” Harris reportedly said during the Labor Day event. “And I couldn’t agree more with President Biden, US Steel should remain American owned and American operated.”

Harris’ comments come in the backdrop of the proposed sale of United States Steel to Japan’s Nippon Steel, something that has been overwhelmingly supported by shareholders but has witnessed vehement opposition from politicians and United Steelworkers union.

United States Steel had held a special meeting of shareholders on April 12, 2024, with 71% of the outstanding shares of U. S. Steel common stock voting in favor of the proposed transaction. This resulted in an overwhelming vote of approval of 99% of the shares represented at that meeting.

However, for the deal to go ahead, it needs approval from the Justice Department and the Committee on Foreign Investment in the United States, comprising members of President Joe Biden’s cabinet.

Biden had earlier stated that it is “important that we maintain strong American steel companies powered by American steel workers.”

U. S. Steel and Nippon Steel currently expect the transaction will be completed in the second half of 2024. However, experts reportedly believe the deal is unlikely to win favor from politicians.

Retail investors on Stocktwits, however, remain optimistic about the deal going through. The sentiment meter has shifted into the ‘extremely bullish’ territory (85/100) from the ‘bullish’ zone a day ago.

As of now, the proposed deal has received all regulatory approvals outside of the United States. David B. Burritt had stated that it is the best deal for American steel, the best deal for American jobs and the best deal for America’s ability to create an even stronger alliance with Japan against China.

Bullish followers of the stock believe that blocking of the deal will hurt the American economy and the country’s relationship with its close ally Japan.