Failure of US Steel-Nippon deal may put thousands of jobs at risk: Report

US Steel has cautioned that failing to merge with Nippon Steel would risk thousands of US union jobs.

US Steel has stated that it would close some steel mills and will most likely move its headquarters out of Pennsylvania, a politically important city, according to a report by Reuters.

This announcement comes at a time when Nippon's planned acquisition of the US steelmaker is receiving growing opposition.

Why is this deal politically important?

Vice President Kamala Harris said that she wants US Steel to be "American owned and operated”.

Former President and US Republican Party Presidential candidate Donald Trump has promised to stop the deal if he is elected to power.

Pennsylvania is a politically important location, which could determine the result of US Presidential Elections 2024.

"We want elected leaders and other key decision makers to recognize the benefits of the deal as well as the unavoidable consequences if the deal fails," the report said quoting US Steel CEO David Burritt in a statement. Employees will conduct a rally outside the headquarters in support of the deal on Wednesday, September 4, the statement added.

"US Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk (and) negatively impacting numerous communities across the locations where its facilities exist,” CEO Burritt said.

The failure of the deal would raise "serious questions about US Steel remaining headquartered in Pittsburgh,” he added.

The company would likely move its headquarters to the south if the deal fails, the report said. However, United Steel workers criticised CEO Burritt for "making baseless and unlawful threats."

"Today’s pathetic attempt to orchestrate a rally in downtown Pittsburgh shows that US Steel is becoming increasingly desperate to save the deal," the report said quoting Union workers.

The Trump campaign did not immediately respond to the report. The Harris campaign refused to comment on the report.

Last week, Nippon Steel stated that it wants to invest over $2.7 billion in union-represented facilities at Mon Valley Works in Pennsylvania and Gary Works in Indiana to aid those communities.

If the deal does get clearance, US Steel said that it "would not make the same financial commitments." The steelmaker has cut jobs in recent years, including in Michigan.

Nippon stated that if the deal is approved, the core senior management and a majority of board members at the US company will be US citizens, the report said.

Nippon's $14.9 billion acquisition move has received all the regulatory approvals from outside of US and from US Steel's shareholders. It is currently being reviewed by US regulators.