The anticipated acquisition of American company U.S. Steel by Japanese company Nippon Steel for a whopping $14.9 billion has caught the attention of the Biden administration. White House national economic adviser Lael Brainard expressed concerns over the potential national security and supply chain implications of the deal, stating that it warrants “serious scrutiny.” These comments come as criticism against the proposed purchase builds up. “The President believes U.S. Steel was an integral part of our arsenal of democracy in WWII and remains a core component of the overall domestic steel production that is critical to our national security,” Ms. Brainard remarked, emphasizing the importance of the American-owned company.
Despite the Biden administration’s openness to international investment in the U.S. and the creation of American jobs, the acquisition of such an iconic American company by a foreign entity, even one from a close ally, has raised red flags regarding its impact on national security and supply chain reliability. President Joe Biden is prepared to carefully review any investigation findings and take action if deemed necessary. The statement marks the administration’s first substantive comments on the deal since its announcement on Monday.
Nippon Steel announced its intent to purchase U.S. Steel following the rejection of offers from rival firms in an auction. The acquisition is expected to result in U.S. Steel becoming a subsidiary of Nippon Steel while maintaining its name and headquarters in Pittsburgh. The deal is anticipated to be finalized in the second or third quarter of 2024.
The announcement of the move has caused a stir among lawmakers from both parties who fear its potential threats to national security and domestic steel production. Senators have expressed concerns about allowing a foreign company to acquire an American icon and urged an investigation into the transaction, emphasizing the need to protect American ownership and prevent further deterioration of the nation’s industrial base.
Democratic Senator Joe Manchin expressed that the deal poses a significant blow to the U.S. steel industry and a direct threat to national security. He emphasized the importance of preventing the reliance on foreign supply chains in order to ensure a level playing field for American manufacturing. Senator John Fetterman has vowed to block the “outrageous” deal, while the United Steelworkers International, the main union at the third largest U.S. steel company, has opposed the acquisition.
The Biden administration shares the concerns raised by lawmakers and unions, acknowledging the importance of a strong U.S. domestic steel industry to the nation’s economy and national security. The administration is committed to ensuring that steelworkers can compete fairly by addressing unfair trade practices and recognizing the vital role of the American steel industry.
With growing bipartisan opposition to the acquisition, there have been calls for a review of the transaction by the Committee on Foreign Investment in the United States. Ms. Brainard also stated that the sale appears to be the type of transaction that CFIUS is set up to carefully investigate.
As the debate over the proposed acquisition intensifies, the administration and lawmakers remain focused on safeguarding national security and ensuring the preservation of American industry ownership. Reuters contributed to this report.
