The White House has expressed concern over Nippon Steel Corp’s proposed acquisition of U. S. Steel Corp, emphasizing the importance of the domestic steel industry to the U. S. economy and national security. They are calling for a thorough review of the deal by the Committee on Foreign Investment in the United States (CFIUS).
National Economic Council Director Lael Brainard said President Joe Biden welcomed manufacturers from the across the world investing in U.S. jobs and workers.
In a statement, it was mentioned that the purchase of an iconic American-owned company by a foreign entity should be closely examined for potential impact on national security and supply chain reliability. The Committee on Foreign Investment in the United States (CFIUS) was established for precisely this purpose, and the Biden administration is prepared to thoroughly review any investigation findings and take appropriate action.
The White House has issued a strongly worded statement regarding a proposed deal that is facing criticism from both Democratic and Republican lawmakers, as well as the United Steelworkers (USW) union. Nippon Steel’s representatives in the U. S. and Tokyo have not yet responded to requests for comment, while U. S. Steel has stated that both companies have voluntarily submitted the deal for review by the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS).
The company expressed respect for the CFIUS process and stated its commitment to collaborating with relevant parties for a comprehensive review. It emphasized the importance of Japan as a U. S. ally, highlighting its multiple steel facilities in the country. The company also noted Nippon Steel’s significant commitments towards supporting both union and non-union employees of U. S. Steel. Furthermore, it emphasized that this collaboration would bolster the American steel industry, generate more jobs, enhance national security, and fortify supply chain security in America.
Investors are predicting potential delays in the U. S. Steel deal due to political controversy, as the company’s shares are trading below the deal value. The concerns expressed by USW President David McCall align with those stated by Brainard regarding the impact on domestic steel production.
According to a statement, U. S. Steel has emphasized its primary focus on generating short-term financial gains for shareholders, sometimes at the cost of workers, communities, and the nation’s long-term manufacturing capabilities.
On Monday, Nippon announced its acquisition of U. S. Steel for $14. 9 billion in cash, beating out competitors Cleveland-Cliffs, ArcelorMittal, and Nucor in an auction. The Biden administration sees U. S. Steel as a vital part of America’s historical and current steel production, considering it essential for national security purposes.
President Biden has prioritized the revival of U. S. manufacturing as a central aspect of his presidency. He highlights the creation of 800, 000 manufacturing jobs during his term thus far. Additionally, he has taken measures to safeguard American steel companies from unfair trade practices in China and other nations, while also demonstrating support for union jobs across various sectors of the economy.
The administration is committed to supporting steelworkers and addressing unfair trade practices. Retired Colonel Heino Klinck warns that questioning the deal on national security grounds could negatively impact the U. S.-Japan alliance.
According to Klinck, the concerns about restricting production for the US Navy due to Japan’s potential offense and Chinese manipulation are unfounded. He believes that Japan would not hinder production for such purposes and that any perceived offense may aid Chinese disinformation efforts in Japan and the region.
George Eliason
