US-Japan steel deal goes to Biden for final decision after deadlock in committee | Business and economics

The Committee on Foreign Investment in the United States failed to agree on the national security risks posed by the proposed acquisition of US Steel.

The decision on whether to allow Nippon Steel’s proposed takeover of US Steel has fallen to US President Joe Biden after a government panel failed to agree on potential risks to national security.

The failure of the Committee on Foreign Investment in the United States (CFIUS) to reach consensus on the $15 billion deal on Monday increases the possibility that Biden will block the takeover in his final days in office.

Biden expressed his opposition to the takeover during his ill-fated re-election campaign, insisting on the need for “strong American steel companies supported by American steel workers.”

After CFIUS failed to reach consensus, Biden has 15 days to approve the deal or extend the timeline for a decision.

US President-elect Donald Trump, who takes office on January 20, also opposed the deal, calling the proposed takeover of the Pittsburgh-based steelmaker by Japan’s largest steel producer a “terrible thing.”

Under the terms of the acquisition, US Steel will become a subsidiary of Nippon Steel but will retain its name and headquarters in Pittsburgh.

The combined company will be one of the world’s largest steel producers.

Both US Steel and Nippon Steel on Monday urged Biden to allow the takeover to proceed as planned.

“The deal between US Steel and Nippon Steel strengthens US national and economic security by investing in manufacturing and innovation – through a company based in one of the US’s closest allies – and forging a steel alliance to combat the competitive threat from China,” US Steel said. In her statement.

“This is a deal that should be approved on its merits, and should be a model for ‘buddy crowd’ investment.”

The United Steelworkers (USW) union, which has expressed doubts that Nippon Steel will retain jobs at unionized plants, reiterated its opposition to the takeover.

“The proposed U.S. Steel-Nippon deal represents nothing more than corporate greed, selling out American workers and endangering the long-term future of the domestic steel industry and our national security,” USW President David McCaul said in a statement.

While Republicans and Democrats are broadly lining up against the deal, opposition has cast a pall over US relations with Japan, one of Washington’s closest allies.

Reuters news agency, citing two people familiar with the matter, reported that Japanese Prime Minister Shigeru Ishiba wrote last month to Biden asking him to approve the deal to avoid harming relations between the two sides.