National Economic Adviser Lael Brainard published a statement Thursday that explained Japanese Nippon Steel Corp’s $14.9 billion proposed acquisition of US Steel Corp. deserves “serious scrutiny” regarding national security and supply chains. 

“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 wrote, referring to the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investment in the US companies. 

Biden’s top economic adviser said the president welcomed companies from around the world investing in US jobs and workers. “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 said. 

On Thursday, US Steel said it and Nippon informed the US Treasury Department about a voluntary request for the department’s CFIUS to begin a review of the deal. 

US Steel operates plants in Pennsylvania and Michigan, two critical states Biden needs to win for re-election. He is the most pro-union president in modern times and must appease United Steelworkers before the 2024 election. 

United Steelworkers President David McCall agreed with Brainard: 

“Our union shares many of the concerns expressed in today’s White House statement, including how this deal may impact the future of domestic steel production.” 

The White House has a challenging juggling act of keeping unions and voters happy while upholding its promise of rebuilding manufacturing. The admin knows any deal with a Japanese firm buying an American company would be terrible optics for next year. 

Since the deal was announced on Monday, several politicians on Capitol Hill, including Pennsylvania Democratic lawmakers – Sen. Bob Casey, Sen. John Fetterman, and Rep. Chris Deluzio sent a letter to Treasury Secretary Janet Yellen asking for CFIUS to review the deal over “national security implications of selling a company manufacturing for some of our most important industries, including defense, power, and infrastructure, to a foreign company.” 

The Senators wrote:

“With the passage of the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act, the United States has acted to make the US market the most competitive in the world and to reshore critical supply chains. Allowing for the ownership of a major industrial participant in infrastructure and clean energy investments to be acquired by a foreign entity would be a step backward in our commitment to supply chain integrity and economic security.”

In a post on X, Fetterman called the deal “outrageous,” adding, “I am committed to anything I can do, from using my platform or my position, in order to block this.”

The acquisition of @U_S_Steel by a foreign company is wrong for workers and wrong for Pennsylvania. I’m gonna do everything I can to block it. pic.twitter.com/9EqohwRhRJ

— Senator John Fetterman (@SenFettermanPA) December 18, 2023

Sen. J.D. Vance of Ohio said he would block the deal: 

“I will do everything in my power to protect the future of our nation’s security, industry, and workers.” 

X shares traded near a 15% discount on Friday morning to the all-cash buyout level of $55 per share. This is an indication traders see regulatory hurdles delaying the deal next year. 

Heino Klinck, a retired US Army colonel who served as deputy assistant secretary of defense for East Asia under former President Donald Trump, told Reuters that questioning the deal on national security grounds could harm US-Japan relations. 

Klinck said, “The Japanese will be offended, and I think it will serve Chinese mis- and disinformation campaigning both in Japan and regionally.” 

National Economic Adviser Lael Brainard published a statement Thursday that explained Japanese Nippon Steel Corp’s $14.9 billion proposed acquisition of US Steel Corp. deserves “serious scrutiny” regarding national security and supply chains. 

“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 wrote, referring to the Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investment in the US companies. 

Biden’s top economic adviser said the president welcomed companies from around the world investing in US jobs and workers. “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 said. 

On Thursday, US Steel said it and Nippon informed the US Treasury Department about a voluntary request for the department’s CFIUS to begin a review of the deal. 

US Steel operates plants in Pennsylvania and Michigan, two critical states Biden needs to win for re-election. He is the most pro-union president in modern times and must appease United Steelworkers before the 2024 election. 

United Steelworkers President David McCall agreed with Brainard: 

“Our union shares many of the concerns expressed in today’s White House statement, including how this deal may impact the future of domestic steel production.” 

The White House has a challenging juggling act of keeping unions and voters happy while upholding its promise of rebuilding manufacturing. The admin knows any deal with a Japanese firm buying an American company would be terrible optics for next year. 

Since the deal was announced on Monday, several politicians on Capitol Hill, including Pennsylvania Democratic lawmakers – Sen. Bob Casey, Sen. John Fetterman, and Rep. Chris Deluzio sent a letter to Treasury Secretary Janet Yellen asking for CFIUS to review the deal over “national security implications of selling a company manufacturing for some of our most important industries, including defense, power, and infrastructure, to a foreign company.” 

The Senators wrote:

“With the passage of the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act, the United States has acted to make the US market the most competitive in the world and to reshore critical supply chains. Allowing for the ownership of a major industrial participant in infrastructure and clean energy investments to be acquired by a foreign entity would be a step backward in our commitment to supply chain integrity and economic security.”

In a post on X, Fetterman called the deal “outrageous,” adding, “I am committed to anything I can do, from using my platform or my position, in order to block this.”

The acquisition of @U_S_Steel by a foreign company is wrong for workers and wrong for Pennsylvania. I’m gonna do everything I can to block it. pic.twitter.com/9EqohwRhRJ

— Senator John Fetterman (@SenFettermanPA) December 18, 2023

Sen. J.D. Vance of Ohio said he would block the deal: 

“I will do everything in my power to protect the future of our nation’s security, industry, and workers.” 

X shares traded near a 15% discount on Friday morning to the all-cash buyout level of $55 per share. This is an indication traders see regulatory hurdles delaying the deal next year. 

Heino Klinck, a retired US Army colonel who served as deputy assistant secretary of defense for East Asia under former President Donald Trump, told Reuters that questioning the deal on national security grounds could harm US-Japan relations. 

Klinck said, “The Japanese will be offended, and I think it will serve Chinese mis- and disinformation campaigning both in Japan and regionally.”