White House urges scrutiny as Nippon Steel eyes $14.1b US steel acquisition

Japan’s Nippon Steel’s bid to acquire US Steel Corp has triggered a national security alarm, prompting the White House to call for a thorough investigation.

The $14.1 billion transaction, presented as a technological alliance with promises of enhanced steel production and eco-friendly efforts, faces intense scrutiny amid concerns about its impact on America’s security and supply chain reliability.

President Joe Biden’s administration, represented by National Economic Advisor Lael Brainard, voiced apprehensions over the iconic American company falling into foreign hands, emphasizing the need to carefully evaluate its implications.

The Committee on Foreign Investment in the United States (CFIUS) has been enlisted to assess the acquisition, marking a pivotal moment in the unfolding drama.

While US Steel and Nippon Steel express optimism for a successful review, trade unions and lawmakers in Washington are not holding back their criticism.

The United Steelworkers (USW) union labeled the deal as a display of “greedy, shortsighted attitude,” casting doubt on Nippon’s commitment to honoring existing contracts. President Biden’s administration appears ready to act based on the investigation’s findings, reflecting the gravity of the situation.

Japan’s Industry Minister Ken Saito acknowledged the necessity for Nippon Steel to follow proper procedures but refrained from further comments, emphasizing that the matter primarily concerns the involved companies.

The combined company has pledged to honor contractual agreements with the United Steelworkers (USW) union, attempting to allay concerns regarding potential disruptions in domestic steel production.

On Capitol Hill, bipartisan concerns were raised, with Pennsylvania Democratic Senator John Fetterman deeming the deal “absolutely outrageous” and stressing the integral link between steel and national security.

Ohio Senator JD Vance, along with two other Republicans, urged Treasury Secretary Janet Yellen, who chairs CFIUS, to intervene and block the acquisition, citing the vital role of domestic steel production in national security.

As the CFIUS embarks on its mandated 45-day review, the fate of this cross-border acquisition hangs in the balance.

The committee’s decision, whether approval, imposition of mitigation measures, or referral to the president for potential blocking, will undoubtedly shape the future landscape of the steel industry and its role in safeguarding America’s national interests.