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Biden Administration Gives Japanese Steelmaker More Time to Make Case for Controversial Deal

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Nippon Steel, Japan’s largest steelmaker, has been granted an additional 90 days to re-file its application for a national security review of its $15 billion takeover bid of US Steel. This extension comes as political opposition mounts during an election year, with President Joe Biden, former President Donald Trump, and Vice President Kamala Harris all voicing opposition to the deal.

The Committee on Foreign Investment in the United States (CFIUS) has been reviewing the acquisition of Pittsburgh-based US Steel for months, citing national security concerns. Given the White House’s indications that it would block the deal and CFIUS officials wanting to avoid political pressures, the decision to extend the timeline seemed the best option.

The takeover has become a contentious issue, with Rust Belt Democrats such as Sen. Sherrod Brown of Ohio and Sen. John Fetterman of Pennsylvania also opposing the deal. The United Steelworkers union, which has endorsed Harris for president, has been a vocal critic of the acquisition.

US Steel has warned that, without Nippon Steel’s support, it could face layoffs and mill closures. The sale process for US Steel began in 2023, following an unsolicited $7 billion offer from Cleveland Cliffs. Nippon’s $14.9 billion bid emerged as the preferred option. Japanese Prime Minister Fumio Kishida previously indicated that the legal reviews would determine the deal’s outcome.

Business groups have expressed concern over the politicization of the CFIUS process, urging Treasury Secretary Janet Yellen to ensure national security risks are evaluated on their merits.

 

Exclusive: US Warns Nippon Steel Bid for U.S. Steel Poses National Security Risk

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The Biden administration, through the Committee on Foreign Investment in the United States (CFIUS), warned Nippon Steel that its $14.9 billion acquisition of U.S. Steel poses a national security threat by potentially weakening the American steel industry. Both Democrats and Republicans have voiced opposition to the deal, with Vice President Kamala Harris and former President Donald Trump expressing strong desires to keep U.S. Steel under American ownership. In a letter sent to the companies, CFIUS highlighted concerns that the transaction would harm U.S. steel production and diminish efforts to seek trade remedies. In their response, the companies warned that rejecting the deal could lead to the idling of U.S. Steel’s blast furnace facilities, result in thousands of job losses, and ultimately weaken the U.S. steel supply chain. While Nippon Steel and U.S. Steel maintain that the deal would strengthen the industry and pose no security risks, political pressures and economic concerns are at the heart of the debate, as the companies consider their legal options to move forward.