US President Joe Biden believes the planned purchase of US Steel by Japan’s Nippon Steel deserves “serious scrutiny” due to potential national security concerns.
Lael Brainard, White House National Economic Adviser, stated that the president “has been clear that we welcome manufacturers around the world building their futures in America with American jobs and American workers.”
However, he also believes the purchase of this iconic American-owned company by a foreign entity — even one from a close ally — appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.
If the Biden administration, through the interagency Committee on Foreign Investment in the United States, blocks the deal on national security grounds, it could be a negative message that questions the openness of the US economy to foreign investment.
However, the United Steelworkers union is opposing the proposed sale, with a number of Rust Belt politicians calling for a CFIUS review to determine whether the deal should be blocked on national security grounds.
“This looks like the type of transaction that the interagency committee on foreign investment Congress empowered and the Biden Administration strengthened is set up to carefully investigate. This Administration will be ready to look carefully at the findings of any such investigation and to act if appropriate.”
The administration estimated the Department of Defence’s demand for products for armaments and related defence systems at about three per cent of US steel production. At the same time, the office considers that level large enough to justify a 25 per cent tariff on steel imports from around the world.
US Steel and Nippon Steel have already announced that they expect the CFIUS review.
