Title: President Biden Urges Scrutiny of Nippon Steel’s Acquisition of U.S. Steel
In a recent development concerning the economic landscape of the United States, President Joe Biden has called for “serious scrutiny” of the proposed acquisition of U.S. Steel by Japan’s Nippon Steel. This move comes amid growing concerns about potential national security risks and supply chain reliability.
Lael Brainard, the director of the National Economic Council, emphasized the need for the Committee on Foreign Investment in the United States (CFIUS) to review the acquisition. Brainard highlighted the potential implications on national security and supply chain stability, necessitating a thorough assessment of the deal.
The acquisition, an all-cash transaction valued at a staggering $14.1 billion, would result in U.S. Steel becoming a subsidiary of Nippon Steel, thereby creating one of the top three steel-producing companies globally. However, the CFIUS, led by Treasury Secretary Janet Yellen, holds the authority to block the sale or modify its terms for the protection of national security interests.
The CFIUS, established to safeguard the nation’s strategic interests, was further empowered with the introduction of the Foreign Investment Risk Review Modernization Act in 2018. To expand its scope even further, President Biden issued an executive order in September 2021, demonstrating his commitment to address potential threats to national security arising from foreign acquisitions.
Drawing attention to potential negative repercussions, the United Steelworkers International, a union that supported Biden during his electoral campaign, opposes the acquisition. The union plans to urge government regulators to closely scrutinize the transaction’s impact on national security and worker welfare.
Additionally, Biden’s political allies in Pennsylvania—a crucial battleground state for his potential reelection—are also voicing objections to the sale. They are demanding assurances to retain U.S. Steel’s workers, plants, and headquarters within the state’s borders.
Critics of the deal argue that such acquisitions prioritize profit-driven executives at the cost of American workers, using them as bargaining chips for the benefit of foreign corporations. These opinions highlight concerns regarding the long-term implications of foreign control over sensitive assets like steel production.
As customary, the CFIUS refrains from publicly commenting on specific transactions it reviews or is rumored to be scrutinizing. However, given the scale of this acquisition and its potential national security implications, it is expected that the CFIUS will conduct a thorough assessment.
The fate of the acquisition remains uncertain, and as the review process unfolds, industry stakeholders, worker representatives, and concerned citizens eagerly await a decision that upholds both economic interests and national security objectives.
