The Biden administration believes that Japanese company Nippon Steel’s planned $14.9 billion acquisition of American company U.S. Steel deserves “serious scrutiny” due to potential national security and supply chain concerns.
White House national economic adviser Lael Brainard made the comments on the proposed deal in a statement on Thursday as backlash over the planned purchase continues to mount.
“The President believes U.S. Steel was an integral part of our arsenal of democracy in WWII and remains a core component of the overall domestic steel production that is critical to our national security. And he has been clear that we welcome manufacturers across the world building their futures in America with American jobs and American workers,” Ms. Brainard said.
“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,” she continued.
Ms. Brainard added that President Joe Biden is prepared to “look carefully at the findings of any such investigation and to act if appropriate.”
Thursday’s statement marks the White House’s first substantive comments on the deal since it was announced on Monday.
The Japanese steel giant said it would purchase Pittsburgh-based U.S. Steel for $14.9 billion after the 122-year-old steelmaker turned down offers from rival Cleveland-Cliffs, ArcelorMittal, and Nucor in an auction.
National Security Concerns
According to the two companies, U.S. Steel will keep its name and its headquarters in Pittsburgh but will become a subsidiary of Nippon. The Tokyo-based firm expects to close in the second or third quarter of 2024.
The announcement sparked immediate concern among both Republican and Democratic lawmakers who fear the deal may threaten national security and undermine vital domestic steel production.
In a letter sent on Thursday to Treasury Secretary Janet Yellen, who also is the chair of the Committee on Foreign Investment in the United States (CFIUS), Sen. J.D. Vance (R-Ohio) and Sen. Josh Hawley (R-Mo.) called the planned purchase “a turning point for an icon of American industry” and warned it would have “dire implications” for America’s industrial base.
“Allowing foreign companies to buy out American companies and enjoy our trade protections subverts the very purpose for which those protections were put in place,” the lawmakers wrote.
‘Major Blow to American Steel Industry’
Elsewhere, Democratic Sen. Joe Manchin (W.Va.) said in a statement that the deal is a “major blow to the American steel industry which has been instrumental in making us the superpower of the world and a direct threat to our national security.”
“At a time when domestic manufacturing–including in the U.S. steel market–is facing increased competition from unfair trade, we must be doing everything we can to prevent any further deterioration of American ownership,” Mr. Manchin said, adding that the newly announced deal “does the exact opposite.”
The lawmaker noted that Americans “cannot have a level playing field while we are dependent on foreign supply chains.”
Sen. John Fetterman (D-Pa.) also vowed to prevent the “absolutely outrageous” deal from going ahead while the United Steelworkers International, the main union at the third largest U.S. steel company, opposed the transaction.
“President Biden believes union workers are the best workers in the world. And that’s why his Administration is committed to doing everything it can to ensure steelworkers can compete on a level playing field, through policies that both combat unfair trade practices and recognize that a strong U.S domestic steel industry is vital to our economy and national security,” Ms. Brainard said Thursday.
Other lawmakers have urged CFIUS to conduct a review of the transaction.
Ms. Brainard also said Thursday that the sale “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.”
Reuters contributed to this report.
From The Epoch Times
