Synopsis:
The proposed $14.1 billion acquisition of US Steel by Japan’s Nippon Steel faces fervent bipartisan opposition in the U.S. Senate due to national security concerns. However, experts believe blocking the deal, despite growing opposition, remains uncertain.
Article:
Bipartisan resistance is mounting against Japan’s Nippon Steel's proposed acquisition of US Steel. Republican senators JD Vance, Josh Hawley, and Marco Rubio have urged Treasury Secretary Janet Yellen to halt the takeover due to severe national security apprehensions. They advocate for an investigation by the Committee on Foreign Investment in the United States (CFIUS) concerning the deal's impact on America's industrial foundation.
Highlighting the essence of domestic steel production for national security, the lawmakers emphasize past efforts by administrations to fortify the steel industry. They argue against allowing foreign companies to acquire American entities, asserting that it undermines established trade protections.
Moreover, concerns escalate as Nippon Steel's past legal violations involving unlawfully dumped steel products in the U.S. surface. Ohio Senator Sherrod Brown, backed by Missouri’s Josh Hawley and Florida’s Marco Rubio, vehemently opposes the deal, stressing the insult to American steelworkers and urging reconsideration in favor of Ohio-based Cleveland Cliffs.
Joining the chorus of opposition, West Virginia Senator Joe Manchin echoes concerns about the sale's threat to national security, emphasizing the need to preserve American ownership in a competitive global market.
However, despite widespread criticism from politicians, unions, and figures like Senator John Fetterman and the United Steelworkers union, expert opinions suggest that CFIUS may unlikely block the deal due to historical ties between the U.S. and Japan.
Michael Leiter, a CFIUS and national security expert, highlights the unlikelihood of CFIUS obstructing a deal with a close ally like Japan. The final decision rests with the president, where President Biden's potential rejection could strain relations with Japan.
Conclusion:
The heated debate over the US Steel acquisition reflects deep concerns about national security and foreign ownership. Despite significant opposition from politicians, unions, and concerns regarding the Japanese buyer's history, expert opinions indicate the regulatory path for blocking such a deal might be challenging. The decision's outcome remains unpredictable, with the stakes high for both economic and diplomatic relations.
Source: STEELGURU
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