A powerful government committee on Monday failed to reach an agreement on whether Nippon Steel’s proposed nearly $15 billion deal to buy U.S. Steel could pose a national security risk. The decision fell to President Joe Biden. long-time business partner.
The Committee on Foreign Investment in the United States, known as CFIUS, has sent Biden a long-awaited report on the merger, but Biden formally objected to the deal in March and now has 15 days left to make a final decision. are. said the White House. A U.S. official familiar with the matter, speaking on condition of anonymity to discuss the private report, said some federal agencies participating in the committee would approve of a Japanese company’s acquisition of a U.S.-owned steelmaker. He said he was skeptical that this would pose a national security risk.
Both Biden and President-elect Donald Trump have courted unionized workers at U.S. Steel. vowed to block the takeover Amid concerns about foreign ownership of America’s major corporations. But the economic risk is that Nippon Steel also has the financial resources to invest in factories and upgrade equipment, which could help maintain steel production in the United States.
An interagency committee reviews such transactions with an eye to potential national security risks. Monday was the deadline to approve the deal and recommend that Biden block it or extend the review process.
The Washington Post earlier reported that CFIUS had submitted its report.
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Based on the terms of the $14.9 billion all-cash transactionU.S. Steel will keep its name and headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan and Andrew Carnegie. According to World Steel Association statistics for 2023, the combined company will be a subsidiary of Nippon Steel and will be among the top three steel producers in the world.
Backed by the United Steelworkers union, Mr. Biden said earlier this year that it is “critically important that (U.S. Steel) remains a domestically owned and operated American steel company.”
President Trump also opposes the deal, vowing on his platform Truth Social earlier this month to “prevent this deal from happening.” President Trump proposed turning around U.S. Steel’s ailing business “through a series of tax breaks and tariffs.”
The steelworkers’ union said it does not believe Nippon Steel will maintain jobs at its member plants, take advantage of collective bargaining benefits or protect U.S. steel production from cheaper foreign imports.
“Our union has been calling for increased scrutiny from the government since the sale was announced, and it’s up to President Biden to decide the best path forward,” Steelworkers Union President David McCall said in a statement Monday. Ta. “We continue to believe that means keeping U.S. Steel domestically owned and operated.”
In the face of political opposition, Nippon Steel and U.S. Steel used public relations campaigns to gain support from skeptics.
U.S. Steel said in a statement Monday that the deal is “the best way to date to ensure U.S. Steel, including our employees, communities and customers, thrives into the future.”
As Nippon Steel began gaining support from some steel union members and local officials around the blast furnaces in Pennsylvania and Indiana, a growing number of conservatives publicly supported the deal. Many supporters said Nippon Steel has a stronger financial balance sheet than rival Cleveland-Cliffs to invest the cash needed to upgrade aging U.S. Steel blast furnaces.
Nippon Steel has pledged to invest $2.7 billion in facilities represented by United Steelworkers, including U.S. Steel’s blast furnaces, and has pledged not to import steel slabs that compete with blast furnaces.
He also promised to protect U.S. Steel on trade issues and not to lay off workers or close plants during the terms of the basic labor agreement. Earlier this month, the company gave U.S. Steel employees $5,000 in closing bonuses, an expense of nearly $100 million.
Nippon Steel also said it is best positioned to help U.S. steel compete in an industry dominated by China.
In a statement to CBS News on Tuesday, the company thanked the president for “the significant efforts we have made to address the national security concerns that have been raised, and the growth of U.S. Steel and the It will protect jobs and strengthen America’s steel industry as a whole, which will strengthen America’s national security.”
The proposed sale comes amid a new wave of political support for rebuilding the U.S. manufacturing industry, a presidential election in which Pennsylvania was a key battleground, and a long-term U.S. steel industry that analysts say has helped revitalize domestic steel. It was carried out during the protectionist tariffs imposed over the years.
CFIUS, chaired by Treasury Secretary Janet Yellen, reviews business transactions between U.S. companies and foreign investors and can block sales or force parties to change the terms of their contracts to protect national security. You can.
The commission’s powers were significantly expanded in 2018 through an act of Congress called the Foreign Investment Risk Review Modernization Act, known as FIRRMA.
In September, Biden will expand the factors the committee must consider when reviewing a deal, including how it impacts U.S. supply chains and whether it jeopardizes sensitive personal data of Americans. issued a presidential order.
Nippon Steel already has manufacturing operations in the United States, Mexico, China, and Southeast Asia. It supplies the world’s top automakers, including Toyota Motor Corporation, and manufactures steel for railways, pipes, home appliances, and skyscrapers.
