Nippon Steel's Acquisition of U.S. Steel Sparks National Security Concerns

The proposed $14.9 billion acquisition of U.S. Steel by Nippon Steel is under scrutiny due to national security risks. The U.S. CFIUS pointed out potential issues around domestic steel production, tariffs, and foreign competition. Lawmakers and experts are divided while Nippon promises safeguarding domestic interests.

The $14.9 billion takeover of U.S. Steel by Nippon Steel has raised national security concerns, as it could impact steel supply for key sectors like transportation, construction, and agriculture, according to a U.S. government letter reviewed by Reuters.

CFIUS highlighted the risks posed by a global oversupply of low-cost Chinese steel, suggesting U.S. Steel's new ownership under Nippon could dampen its efforts to seek tariffs on imports. The committee's letter, first reported by Reuters, warned that Nippon's involvement might lead to reduced domestic steel production capacity.

The Biden administration may use these security concerns to block the merger. While some lawmakers and industry experts question the validity of these arguments, others, including Vice President Harris and former President Trump, have expressed opposition to the deal. Nippon Steel, in a counter-response, pledged to invest billions in U.S. Steel facilities and maintain U.S. jobs and production, offering a national security agreement to mitigate risks.

(With inputs from agencies.)