Lawmakers Urge CFIUS to Block Acquisition of US Steel by Japanese Firm

At least seven Democratic and Republican lawmakers are urging the Committee on Foreign Investment in the U.S. to oppose or scrutinize the proposed acquisition of U.S. Steel Corp by Japan-based Nippon Steel Corp., saying the $14.9 billion deal raises serious economic and national security concerns.

In a Dec. 19 letter to Treasury Secretary Janet Yellen, who chairs CFIUS, Republican Sens. Marco Rubio of Florida, J.D. Vance of Ohio, and Josh Hawley of Missouri called for the committee to block the transaction, describing U.S. Steel as an "icon of American industry" whose takeover by a foreign firm would have “dire implications” for the U.S. industrial base.

“Democratic and Republican administrations have both acted decisively over the last forty years to bolster” the domestic steel industry, whose products are used in defense and other key manufacturing sectors, the senators said. Nippon Steel, which is subsidized by the Japanese government, would not share that commitment, as its “allegiances clearly lie with a foreign state.”

The senators added that U.S. Steel has other options for new ownership, as it “received competitive bids from American companies who would not pose the same risks.”

On the Democratic side, Sens. Bob Casey and John Fetterman and Rep. Chris Deluzio, all of Pennsylvania, where U.S. Steel is headquartered, sent a similar letter to Yellen on Dec. 19 calling for CFIUS to block the acquisition. "Allowing for the ownership of a major industrial participant in infrastructure and clean energy investments to be acquired by a foreign entity would be a step backwards in our commitment to supply chain integrity and economic security," the lawmakers wrote.

In a video posted on his Twitter account on Dec. 18, Fetterman called the acquisition “absolutely outrageous” and indicated he is “committed to doing anything I can do” to block it.

Sen. Sherrod Brown, D-Ohio, criticized the acquisition, citing security and workforce concerns. In a Dec. 20 letter to President Joe Biden, Brown accused Nippon Steel of failing “to consult or even notify the United Steelworkers in advance of its acquisition announcement.” He urged Biden to “utilize the authorities available” to him, including a CFIUS review, to assess the deal.

White House Press Secretary Karine Jean-Pierre told reporters on Dec. 19 there “could potentially be a regulatory review” of the transaction, but declined to say whether the review might involve CFIUS. Speaking to reporters Dec. 20, she added "there probably will be some sort of review -- a regulatory review."

Treasury, Nippon Steel, and U.S. Steel did not respond to requests for comment. At a conference in September, Yellen said an “open investment climate is crucial to the U.S. economy” but that national security is the “foremost priority" of CFIUS (see 2309140005).

Nippon Steel and U.S. Steel announced their deal on Dec. 18, saying that combining their technologies and manufacturing capabilities would allow them to better serve their customers. They pledged to honor all existing collective bargaining agreements between U.S. Steel and its unions.