A U.S. government panel has been unable to reach a consensus on whether Nippon Steel’s proposed acquisition of U.S. Steel poses a threat to national security, pushing the decision to the White House.
Late Monday, the Japanese company confirmed that the Committee on Foreign Investment in the United States (CFIUS) had referred the matter to President Joe Biden after failing to come to an agreement.
This deadlock means the controversial $14.9 billion deal now awaits a decision from the President, who is legally obligated to act within 15 days.
“Nippon Steel has been informed by CFIUS that the Committee has referred this matter to President Biden after failing to reach a consensus on our transaction with US Steel,” the company said.
The deal has sparked criticism from numerous U.S. political figures, including President-elect Donald Trump and incoming Vice President JD Vance, both of whom have voiced their opposition.
Biden has been vocal about his concerns over the acquisition for several months, a position that aligns with a growing chorus of U.S. political and labor leaders.
As the 2024 presidential campaign heats up, Pennsylvania, a critical swing state, has become central to the debate. Leaders of the United Steelworkers (USW) union have been among the most outspoken opponents, citing concerns over the impact on jobs and the future of the steel industry in the region.
Despite hopes within Nippon that the post-election landscape might change, there has been little indication that these political dynamics will shift.
Reports from U.S. media outlets suggest that blocking the deal could lead to litigation from the companies involved. Additionally, there are concerns about potential diplomatic fallout, given the strong backing of the deal from Japan, a key U.S. ally.
Nippon has continued to argue that the transaction should proceed, emphasizing the steps it has taken to address national security concerns and its commitment to revitalizing U.S. Steel.
“During the 15-day period that the President has to make a final decision, we urge him to reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow US Steel, protect American jobs, and strengthen the entire American steel industry, which will enhance American national security,” the company said in a statement.
“We are confident that our transaction should and will be approved if it is fairly evaluated on its merits.”
US Steel has also appealed to Biden, underscoring Nippon’s status as a partner from “one of the United States’ closest allies.”
The steelmaker describes the transaction as an essential step in combating the growing competitive threat posed by China.
“The Nippon deal is the best way, by far, to ensure that US Steel, including its employees, communities, and customers, will thrive well into the future,” US Steel said.
Nippon insists that the deal would inject much-needed capital into U.S. Steel’s aging plants, particularly in Pennsylvania’s Mon Valley, home to facilities dating back to the late 1800s.
The company views the transaction as a critical lifeline for the region’s struggling steel industry and has pledged to keep U.S. Steel’s headquarters in Pittsburgh.
However, the United Steelworkers union has strongly opposed the deal, casting doubt on Nippon’s promises and accusing U.S. Steel executives of pursuing the transaction for personal financial gain.
“The proposed US Steel-Nippon transaction represents nothing more than corporate greed, selling out American workers and jeopardizing the long-term future of the domestic steel industry and our national security,” USW President David McCall said in a statement.
He urged President Biden to block the deal, reinforcing the union’s stance that the transaction would be harmful to U.S. workers and the nation’s steel industry.
