WASHINGTON (AP) — A powerful government panel on Monday failed to reach consensus on the possible national security risks of a nearly $15 billion proposed deal for Nippon Steel of Japan to purchase U.S. Steel, leaving a decision to President Joe Biden, a longtime opponent of the deal.
The Committee on Foreign Investment in the United States, known as CFIUS, sent its long-awaited report on the merger to Biden, who formally came out against the deal in March of this year and now has 15 days to reach a final decision, 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 an American-owned steelmaker would create national security risks.
Both Biden and President-elect Donald Trump courted unionized workers at U.S. Steel and vowed to block the acquisition amid concerns about foreign ownership of a flagship American company. The economic risk, however, is that Nippon Steel also has the financial resources to invest in the mills and upgrade them, possibly helping to preserve steel production within the United States.
The interagency committee reviews such deals with an eye toward potential national security risks. Monday was the deadline to approve the deal, recommend that Biden block it or extend the review process.
The Washington Post earlier reported CFIUS’ submission of its report.
Under the terms of the approximately $14.9 billion all-cash deal, U.S. Steel would keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan and Andrew Carnegie. It would become a subsidiary of Nippon Steel, and the combined company would be among the top three steel-producing companies in the world, according to 2023 figures from the World Steel Association.
Biden, backed by the United Steelworkers, said earlier this year that it was “vital for (U.S. Steel) to remain an American steel company that is domestically owned and operated.”
Trump has also opposed the acquisition and vowed earlier this month on his Truth Social platform to “block this deal from happening.” Trump proposed to revive U.S. Steel’s flagging fortunes “through a series of Tax Incentives and Tariffs.”
The steelworkers union has said it doesn’t believe Nippon Steel would keep jobs at unionized plants, make good on collectively bargained benefits or protect American steel production from cheap foreign imports.
“Our union has been calling for strict government scrutiny of the sale since it was announced. Now it’s up to President Biden to determine the best path forward,” David McCall, the steelworkers’ president, said in a statement Monday. “We continue to believe that means keeping U.S. Steel domestically owned and operated.”