The Committee on Foreign Investment in the United States has reached an impasse regarding the national security implications of the proposed acquisition of US Steel.
The fate of Nippon Steel’s proposed takeover of US Steel now rests in the hands of President Joe Biden, following a lack of consensus among government officials regarding potential national security concerns.
The inability of the Committee on Foreign Investment in the US (CFIUS) to achieve a consensus regarding the $15 billion deal on Monday raises the possibility that President Biden may intervene to block the takeover during the final days of his administration.
During his re-election campaign, Biden expressed his strong opposition to the acquisition, emphasizing the necessity for robust American steel companies supported by American steelworkers.
In a significant development, the Committee on Foreign Investment in the United States, or CFIUS, has been unable to reach a consensus. As a result, President Biden now faces a crucial 15-day window to either approve the deal or extend the timeline for a final decision.
US President-elect Donald Trump, set to assume office on January 20, has voiced strong opposition to the deal, characterizing the proposed acquisition of the Pittsburgh-based steel manufacturer by Japan’s largest steel producer as “a horrible thing.”
In a significant development in the steel industry, US Steel is set to become a subsidiary of Nippon Steel. Notably, the company will retain its name and maintain its headquarters in Pittsburgh, ensuring continuity amid the transition.
A newly formed entity is set to emerge as one of the largest steel producers globally.
On Monday, US Steel and Nippon Steel called on President Biden to permit the acquisition to move forward as originally intended.
In a recent statement, U.S. Steel announced that its transaction with Nippon Steel is set to bolster national and economic security in the United States. The deal emphasizes investment in manufacturing and innovation, coming from a company located in one of America’s closest allies. Furthermore, it aims to establish a strong alliance in the steel industry to address the competitive challenges posed by China.
Officials assert that this transaction merits approval based on its inherent qualities and could serve as a benchmark for future ‘friendshoring’ investments.
The United Steelworkers labour union (USW) has voiced its concerns regarding Nippon Steel’s commitment to maintaining jobs at unionised facilities, reaffirming its stance against the proposed takeover.
In a recent statement, USW President David McCall criticized the proposed transaction between US Steel and Nippon, labeling it as an act of corporate greed. He expressed concerns that this move compromises American workers and poses a threat to the long-term viability of the domestic steel industry, as well as national security.
In a significant development, both Republicans and Democrats have united in their opposition to the deal, raising concerns about its potential impact on US relations with Japan, a key ally of Washington.
In a significant diplomatic move, Japanese Prime Minister Shigeru Ishiba reached out to President Biden last month, urging him to approve a crucial deal. This request, reported by the Reuters news agency, aims to prevent any potential strain on the relations between the two nations, according to sources close to the situation.
