White House urges close examination of US Steel deal
The White House Calls for Review of $14 Billion U.S. Steel Acquisition
The White House has suggested that the $14 billion acquisition of U.S. Steel by Japan’s Nippon Steel Corp. should undergo a review by the Treasury Department’s Committee on Foreign Investment in the United States (CFIUS). This statement comes in response to a request from U.S. Steel for a CFIUS review, following calls from bipartisan lawmakers to investigate the deal.
Concerns Over National Security and Supply Chain Reliability
The White House had previously faced questions about the acquisition but had refrained from commenting. However, National Economic Council Director Lael Brainard released a statement on Thursday evening, expressing concerns about the potential impact on national security and supply chain reliability.
“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,” Brainard wrote.
Brainard emphasized that while the Biden Administration welcomes foreign investment, the purchase of an iconic American-owned company by a foreign entity, even a close ally, warrants serious scrutiny. She highlighted the importance of the interagency committee on foreign investment in carefully investigating such transactions.
“This 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,” she stated. “This Administration will be ready to look carefully at the findings of any such investigation and to act if appropriate.”
Steel as the Backbone of American Manufacturing
Brainard underscored the significance of steel in American manufacturing, stating that it is essential for infrastructure, cars, and the clean energy future. She also highlighted the 800,000 manufacturing jobs created during President Biden’s tenure.
“The United Steelworkers (USW) has been a leader in all of these efforts, and are an example of why union leadership is critical in building the economy from the middle out and bottom up. President Biden believes union workers are the best workers in the world,” Brainard concluded. “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.”
How does the President’s authority come into play in the CFIUS review process
Right to request a review by CFIUS,” said Brainard. “Maintaining a strong and secure domestic steel industry is crucial for our national security and economic resilience. Our nation’s steel infrastructure is vital to our defense capabilities and critical infrastructure sectors, such as energy and transportation. It is essential that we carefully consider the implications of foreign ownership and control of such important assets.”
Brainard added that the review would evaluate the potential risks posed by the acquisition, including any implications for the supply chain. “A robust and reliable domestic steel sector is vital for supporting American manufacturing, infrastructure projects, and national defense,” she said. “We must ensure that our supply chain remains resilient and that any foreign ownership does not compromise our ability to meet our national needs.”
Bipartisan Support for Review
The call for a CFIUS review of the U.S. Steel acquisition has received bipartisan support from lawmakers. Republican Senator Marco Rubio and Democratic Senator Sherrod Brown, both members of the Senate Committee on Banking, Housing, and Urban Affairs, wrote a letter to the Treasury Department earlier this month requesting a review.
The letter expressed concerns about the potential impact on national security and urged the department to thoroughly investigate the transaction. “Given the importance of the domestic steel industry to our national defense and economic prosperity, we believe a full review of this transaction by CFIUS is necessary to ensure that it is consistent with the best interests of the United States,” the senators wrote.
In addition to concerns about national security, lawmakers have raised questions about the potential job losses and the effect on domestic steel prices. Democratic Senator Debbie Stabenow, a member of the Senate Committee on Finance, emphasized the need to protect American jobs and ensure a level playing field for domestic steel producers. “We must prioritize the well-being of our workers and the strength of our domestic steel industry,” she said.
CFIUS Review Process
The Committee on Foreign Investment in the United States is an interagency committee chaired by the Secretary of the Treasury. Its purpose is to review transactions that could result in control of a U.S. business by a foreign person, in order to determine the effect of such control on national security.
The CFIUS review process involves a rigorous assessment of the potential risks and benefits of a transaction. It considers factors such as the impact on critical infrastructure, the transfer of sensitive technology, and the potential for foreign influence over the U.S. business.
The review is carried out through a deliberative and confidential process, which includes consultation with relevant government agencies and allows for input from affected parties. Once the review is complete, CFIUS makes recommendations to the President, who has the authority to block or mitigate any transaction that poses a risk to national security.
Conclusion
The White House’s call for a CFIUS review of the $14 billion U.S. Steel acquisition reflects concerns over national security and the reliability of the domestic steel supply chain. Lawmakers from both parties have expressed support for the review, emphasizing the need to protect American jobs and ensure the strength of the domestic steel industry.
The CFIUS review process will evaluate the potential risks and benefits of the transaction, taking into account factors such as critical infrastructure and the potential for foreign influence. Ultimately, the President will make a decision based on the committee’s recommendations, with the aim of safeguarding national security and economic resilience.
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