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President Biden expressed opposition to Japan’s Nippon Steel’s proposed takeover of U.S. Steel at a recent campaign event in Pennsylvania, a key state for American steel production. Despite U.S. Steel’s announcement that the acquisition could be completed in the second half of this year, Nippon Steel delayed the timeline to provide more information to the Department of Justice.
The intensifying scrutiny of the deal has raised concerns that it may be blocked by the Biden administration, potentially involving the Committee on Foreign Investment in the United States (CFIUS). This panel, established in the 1970s, reviews international mergers for national security concerns, with a focus on preventing technology leakage and foreign investments in critical industries like steel.
While past deals involving foreign companies have been blocked by CFIUS, the current situation with Nippon’s bid for U.S. Steel mirrors tensions from the 1980s over trade with Japan. The Reagan administration previously intervened in a metals merger involving Nippon Steel due to national security concerns.
With the U.S. now prioritizing supply chain resilience and national security, the outcome of the U.S. Steel acquisition remains uncertain. The Biden administration may push for safeguards to protect American jobs and ensure domestic steel supplies. Treasury Secretary Yellen has supported the idea of U.S. Steel remaining in American hands, emphasizing the importance of national interests and worker welfare.
As the review process continues, experts speculate on the potential political motivations behind possible action to keep U.S. Steel an American-owned company, especially in the lead-up to the presidential election. Nippon Steel has reassured that the deal would not lead to job losses and promised investment in Pennsylvania, but the final decision remains up in the air.
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