A powerful government panel failed to reach consensus on Monday over the potential national security risks of a proposed nearly $15 billion deal by Japan's Nippon Steel to buy U.S. steel, leaving the decision up to President Joe Biden. longtime opponents of the deal,
The Committee on Foreign Investment in the United States, known as CFIUS, sent its long-awaited report on the merger to Mr Biden, who formally came out against the deal in March this year and is now weighing in on a final decision. It takes 15 days to reach. , the White House said. A U.S. official familiar with the matter, speaking on condition of anonymity to discuss the private report, said some federal agencies represented on the panel were skeptical that allowing a Japanese company to buy a U.S.-owned steelmaker would harm national security. Security risk will arise.
Mr Biden and President-elect Donald Trump both met with unionized workers at US Steel vowed to stop the takeover Amid concerns over foreign ownership of a major US company. However, the economic risk is that Nippon Steel also has the financial resources to invest in and upgrade mills, which would potentially help preserve steel production within the United States.
The interagency committee reviews such deals considering potential national security risks. Monday was the deadline to approve the deal, recommend that Mr Biden block it or extend the review process.
The Washington Post previously reported on CFIUS submitting its report.
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Under conditions of approx. $14.9 billion all-cash dealUS Steel will keep its name and headquarters in Pittsburgh, where it was founded in 1901 by JPMorgan and Andrew Carnegie. It will become a subsidiary of Nippon Steel and the combined company will be among the top three steel producing companies in the world, according to 2023 data from the World Steel Association.
Mr Biden, backed by the United Steelworkers, said earlier this year that “it is important for (US Steel) to remain an American steel company that is domestically owned and operated.”
Trump has also opposed the takeover and earlier this month vowed to “stop this deal from happening” on his Truth social platform. Trump proposed reviving US steel's stellar fortunes “through a series of tax incentives and tariffs.”
The Steelworkers Union has said it does not believe Nippon Steel will keep jobs at unionized plants, make good profits on collective bargaining benefits or protect U.S. steel production from cheap foreign imports.
“Our union has been calling for a rigorous government investigation of the sale since it was announced. It is now up to President Biden to decide the best path forward,” Steelworkers President David McCall said in a statement Monday. “We believe this means keeping U.S. steel domestically owned and operated.”
In the face of political opposition, Nippon Steel and US Steel mounted a public relations campaign to win over skeptics.
U.S. Steel said in a statement Monday that the deal is “the best way yet to ensure that U.S. Steel, including its employees, communities and customers, will grow well into the future.”
A growing number of conservatives publicly supported the deal, as Nippon Steel began to win over some steelworkers union members and local officials around its blast furnaces in Pennsylvania and Indiana. Many supporters said Nippon Steel has a stronger financial balance sheet than rival Cleveland-Cliffs, which could invest the cash needed to upgrade aging American Steel blast furnaces.
Nippon Steel promised to invest $2.7 billion in United Steelworkers-represented facilities, including US Steel's blast furnaces, and promised not to import steel slabs that would compete with the blast furnaces.
It also promised to defend US Steel in trade matters and not to lay off workers or close plants during the duration of the basic labor agreement. Earlier this month, it offered $5,000 in termination bonuses to U.S. Steel employees, worth about $100 million.
Nippon Steel also said it is best positioned to help U.S. steel compete in an industry dominated by China.
The proposed sale comes during a tide of renewed political support for rebuilding America's manufacturing sector, a presidential campaign in which Pennsylvania was a key battleground, and during a long period of protectionist U.S. tariffs that analysts say could hurt domestic steel. Has helped in strengthening again.
Chaired by Treasury Secretary Janet Yellen, CFIUS investigates trade deals between U.S. companies and foreign investors and can block sales or force the parties to change the terms of the agreement for the purpose of protecting national security.
The committee's powers were significantly expanded in 2018 through an Act of Congress, the Foreign Investment Risk Review Modernization Act, known as FIRRMA.
In September, Mr Biden issued an executive order that expands the factors the committee must consider when reviewing deals – such as how the deal affects the US supply chain or the risk it poses to Americans' sensitive personal data. Puts in.
Nippon Steel already has manufacturing operations in the US, Mexico, China and Southeast Asia. It supplies the world's top automakers, including Toyota Motor Corp., and makes steel for railways, pipes, appliances and skyscrapers.