Biden believes Nippon purchase of U.S. Steel deserves "serious scrutiny"
The carefully worded remark shows the high stakes for Biden if his administration were to block the deal on national security grounds.
President Joe Biden believes Japanese company Nippon Steel's planned purchase of iconic American company U.S. Steel deserves "serious scrutiny" because of potential national security and supply chain concerns, a top White House official said Thursday.
Biden "has been clear that we welcome manufacturers across the world building their futures in America with American jobs and American workers," White House National Economic Adviser Lael Brainard said in the administration's most extensive comment yet on the proposed deal. "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."
The carefully worded remark shows the high stakes for Biden if his administration, through the interagency Committee on Foreign Investment in the United States, were to block the deal on national security grounds since that would send a negative signal to the rest of the world about the openness of the U.S. economy to foreign investment.
However, the United Steelworkers union opposes the proposed sale, and a number of Rust Belt politicians have called for a CFIUS review to determine whether it should be blocked on national security grounds.
"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. This Administration will be ready to look carefully at the findings of any such investigation and to act if appropriate," Brainard continued.
The U.S. Defense Department requires a range of steel products for weapons and related defense systems. The Trump administration estimated that total demand at about three percent of U.S. steel production. However, it regards that level as large enough to justify imposing a 25 percent tariff on steel imports from around the world.
U.S. Steel and Nippon Steel have already said they expect a CFIUS review of the transaction.
