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Lawmakers urge White House to review US Steel sale

The Biden administration has already raised national security concerns about Tokyo-based Nippon Steel’s proposed $15 billion deal to acquire the storied steelmaker.

WASHINGTON (CN) — A bipartisan group of lawmakers Wednesday implored President Joe Biden to use all the tools at his disposal to scrutinize a Japanese steelmaking giant’s multibillion-dollar purchase of U.S. Steel.

The call to action comes just weeks after Nippon Steel announced it had reached an agreement with U.S. Steel to acquire the company for roughly $14.9 billion. The proposed sale, made public Dec. 18, 2023, would make Nippon Steel one of the world’s top steel producers.

The proposed transaction has raised questions about the future of U.S. steel production and about the security of tense of thousands of American steelworkers.

White House Economic Advisor Lael Brainard, writing in a Dec. 21, 2023, statement, said that the acquisition “appears to deserve serious scrutiny” and that it could have potential impacts on national security and the supply chain. Brainard suggested that the Committee on Foreign Investment in the United States, an interagency body aimed at reviewing such transactions, should step in.

Now, more than 50 members of the Congressional Labor Caucus are urging President Biden to take a more active role.

To protect the U.S. steel industry and its jobs, “it is critical that any company that acquires U.S. Steel commits to respecting and working collaboratively with the company’s workforce,” the lawmakers wrote in a letter to the White House dated Wednesday.

The group, which included New Jersey Democrat Donald Norcross, Nebraska Republican Don Bacon and Pennsylvania Democrat Susan Wild, raised concerns that the United Steelworkers, the preeminent U.S. steelworkers union, had not been consulted on the proposed acquisition by either Nippon Steel or U.S. Steel. Such an exclusion “appears to be a violation of U.S. Steel’s partnership agreement with USW,” the lawmakers wrote.

According to the union, the agreement in question requires U.S. Steel to notify United Steelworkers of “a change in control or business conditions.”

Union president David McCall said in a Dec. 18, 2023, statement that, because it was left out of sale negotiations, the organization “does not believe that Nippon understands the full breadth of the obligations of all our agreements” with U.S. Steel.

Nippon Steel, for its part, has said it plans to honor all of U.S. Steel’s existing union contracts.

Lawmakers on Wednesday also noted the potential national security risks of the proposed transaction.

“The proposed acquisition of a major American steel producer by a foreign company also raises questions about the implications of this acquisition for U.S. national security and domestic steel production capabilities,” the letter read.

It’s not the first time in recent weeks that lawmakers have urged the Biden administration to take a look at the proposed U.S. Steel sale.

A trio of Senate Republicans led by Missouri Senator Josh Hawley pushed Treasury Secretary Janet Yellen, who chairs the government’s foreign investment review board, to block the transaction entirely. The lawmakers argued that U.S. Steel had prioritized maximizing shareholder value over national security and economic interests.

“The transaction was not the product of careful deliberation over stakeholder interests, but rather the result of an auction to maximize shareholder returns,” the senators told Yellen.

The Committee on Foreign Investment in the United States has yet to say publicly whether it will review the proposed sale.

As for where the White House stands, Brainard wrote Dec. 21, 2023, that the Biden administration is “ready to look carefully at the findings” of any future investigation.

The U.S. Steel sale has yet to be approved by U.S. regulators — although the boards of both Nippon Steel and U.S. Steel have greenlit the transaction. The companies have said that they aim to finalize the acquisition as early as the second quarter of this year.

Follow @BenjaminSWeiss
Categories / Economy, Government, National, Politics

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