A powerful government panel, the Committee on Foreign Investment in the United States (CFIUS), failed to reach a consensus on the national security implications of Nippon Steel’s proposed $15 billion acquisition of U.S. Steel. This leaves the final decision to President Joe Biden, a long-time opponent of the deal. The CFIUS report, submitted on Monday, December 24, 2024, was sent to the White House, which stated that Biden now has 15 days to decide. A U.S. official, speaking anonymously, revealed that some federal agencies on the panel were skeptical about national security risks.
Both President Biden and former President Trump, during his campaign, courted U.S. Steel’s unionized workers and pledged to block the acquisition, citing concerns about foreign ownership of a major American company. However, the potential economic benefit of Nippon Steel’s investment in upgrading U.S. Steel’s mills and preserving domestic steel production presents a counterargument. The interagency committee’s Monday deadline required them to either approve the deal, recommend a presidential block, or extend the review. The *Washington Post* was among the first to report on CFIUS’s submission.
Under the terms of the deal, U.S. Steel would retain its name and Pittsburgh headquarters, becoming a subsidiary of Nippon Steel. The combined entity would rank among the world’s top three steel producers. President Biden, supported by the United Steelworkers union, previously stated that U.S. Steel’s domestic ownership and operation were vital. Trump, similarly opposed, reiterated his intention to block the deal on his Truth Social platform, proposing tax incentives and tariffs to revive U.S. Steel. The steelworkers union voiced concerns that Nippon Steel wouldn’t maintain union jobs, benefits, or protect against cheap foreign imports. Union president David McCall stated that the decision now rests with President Biden, reiterating the union’s preference for domestic ownership.
Despite political opposition, Nippon Steel and U.S. Steel launched a public relations campaign to sway skeptics. U.S. Steel claimed the deal would ensure the company’s future success. A growing number of conservatives, along with some steelworkers and local officials, publicly supported the deal, highlighting Nippon Steel’s superior financial capacity to upgrade U.S. Steel’s facilities compared to competitors. Nippon Steel pledged $2.7 billion in investments, promising not to import competing steel slabs, protect U.S. Steel in trade disputes, and avoid layoffs or plant closures. They also offered $5,000 closing bonuses to U.S. Steel employees. Nippon Steel argued that it was best positioned to bolster American steel’s competitiveness against Chinese dominance. In a statement to CBS News, the company urged the president to consider its efforts to address national security concerns and its commitment to growing U.S. Steel and protecting American jobs.
The proposed sale occurred amidst renewed political support for rebuilding American manufacturing, a key issue during presidential campaigns, and a period of protectionist U.S. tariffs that have boosted domestic steel production. CFIUS, chaired by Treasury Secretary Janet Yellen, reviews deals for national security risks and can block sales or force modifications. Its powers were significantly expanded in 2018 by the Foreign Investment Risk Review Modernization Act (FIRRMA). In September, President Biden issued an executive order broadening the factors CFIUS considers, including supply chain impact and data security. Nippon Steel already operates in the U.S., Mexico, China, and Southeast Asia, supplying major automakers and various industries.