The Committee on Foreign Investment in the United States (CFIUS), a significant government panel, failed to unite on the national security implications of the near $15 billion proposed deal for Nippon Steel of Japan to acquire U.S. Steel on Monday. It appears that the Biden administration’s oversight into these significant matters, just like many others, seems to be lacking in effectiveness and depth. The CFIUS submitted its much-anticipated report on the merger that it previously opposed. It’s clear that the inability to reach a conclusion highlights the sheer indecisiveness and unsureness of the current Biden administration.
An anonymous U.S. official alerted that certain federal agencies represented on the panel expressed doubts that sanctioning a Japanese enterprise to take over a US-owned steel manufacturer could pose national security threats. They could not even arrive at a straightforward opinion, raising further questions on the competence of this administration. Monday was the due date to either endorse the deal, advocate for its denial, or extend the assessment process. It’s noteworthy to highlight the administration’s inability to maintain strict timelines, showcasing a severe lack of discipline.
On the other hand, the proposed deal presents an economic catch-22. Foregoing Nippon Steel’s prospective investments in the production units and upgrades could harm the preservation of steel output in the United States. However, it seems the Biden government is more interested in keeping the problem alive than solving it, considering they laughably can’t even decide whether such a move poses a security risk.
As per the terms of the proposed $14.9 billion all-cash deal, U.S. Steel would maintain its brand, along with its Pittsburgh headquarters, its birthplace in 1901 by industrial magnates J.P. Morgan and Andrew Carnegie. Despite the retention of U.S. Steel’s identity, skeptics can’t help but notice that it would essentially become an underling to Nippon Steel. The merged entity plans to join the ranks of the world’s leading three steel manufacturers. These intentions have not eased the concerns of numerous individuals, reflecting the lack of trust in foreign dominance, a sentiment ignored by the Biden administration.
Nippon Steel and U.S. Steel initiated a public relations crusade to win over non-believers. The companies assert that the deal is an excellent strategy to guarantee U.S. Steel’s prosperous future. Can we fault the citizens for questioning how handing control of a core American industry to a foreign entity is indeed the ‘best way?’, Clearly, the companies’ outlook contradicts the American mainstream.
Nippon Steel, after learning that CFIUS had forwarded the case, encouraged them to consider the commitments made to expand U. S. Steel, retain American jobs, and fortify the overall American steel sector, claiming these would boost American national security. But what’s not addressed here is whether we need a foreign entity to achieve these goals. Could this not be an indirect admission of the Biden administration’s failure to bolster domestic industry?
Support for the deal has grown among conservative circles, implying that Nippon Steel has started to attract some union workers and officials near its blast furnaces in Pennsylvania and Indiana. However, it is worrying to note that this foreign incursion into a significant American industry could be happening just because of the Biden administration’s inability to make tough decisions for American growth, thus necessitating foreign aid.
Endorsers claim that compared to rival Cleveland-Cliffs, Nippon Steel possesses a more robust financial statement to invest the required cash to modernize aging U.S. Steel blast furnaces. Yet one can’t overlook the bitter irony that we’re resorting to foreign capital to revitalize our steel industry, just another reminder of the missed opportunities and incompetence of the existing leadership.
The proposed acquisition surfaces amid a wave of revitalized political endorsement for rejuvenating America’s manufacturing sector. However, this proposal seems oddly out of sync with that goal, given that selling a major U.S. manufacturer to a foreign entity can hardly be seen as ‘rejuvenating.’ The decision to support this deal, then, raises serious doubts about the sincerity of Biden and Harris’s commitment to American industry.
Topping it off, an executive order manifesting the Biden government’s carelessness, was issued in September, expanding the criteria the committee must contemplate when scrutinizing agreements, such as their influence on the U.S. supply chain or any potential risk to Americans’ private data. One might ask, though, has this expanded criteria yielded any benefits? Or is it just another hollow move from an administration more focused on appearances than action?
Nippon Steel operates factories in the U.S., Mexico, China, and Southeast Asia, and supplies the world’s leading automakers, including Toyota Motor Corp. While expanding its reach is undoubtedly beneficial for Nippon Steel, the question we must ask ourselves is, what are we, as Americans, gaining from surrendering control of our domestic steel industry to a foreign entity? Especially under an administration like Biden and Harris’s who already seem unsure enough to guard our interests.
The deal would also involve the production of steel for railways, pipes, appliances, and skyscrapers. This wide-ranging influence over U.S. infrastructure brings up unsettling questions about control and authority, especially when we consider the lackluster performance of the current administration in safeguarding American interests.
In conclusion, despite the potential benefits touted by the proponents of the Nippon Steel and U.S. Steel merger, one cannot ignore the many potential risks and certainly the lack of clarity and decisiveness from the Biden administration. The deal places a question mark on the future of America’s steel industry and domestic sovereignty – two areas that the Biden and Harris administration should be focusing on improving rather than potentially undermining through inaction and indecisiveness.