It seems that three Republican Senators – J.D. Vance, Josh Hawley, and Marco Rubio – have called for a committee to be formed to examine the potential acquisition of U.S. Steel by Nippon Steel due to national security concerns. However, it appears unlikely that this move will lead to the blockage of the deal by the Committee on Foreign Investment in the United States (CFIUS), despite growing political opposition to the transaction.
CFIUS, a cross-agency body that reviews and determines the impact of foreign transactions on national security, is headed by Janet Yellen. The committee has the authority to block acquisitions involving foreign investors with conflicting loyalties and questionable financial health. In this case, Nippon Steel's financial instability and its foreign roots raise some red flags.
However, historically, CFIUS has not prevented close US allies like Japan from acquiring US companies. Thus, it is unlikely that the acquisition will be blocked, even with growing political opposition. Despite the controversial nature of the deal, the final decision rests with President Biden, who ultimately has the power to block the transaction for national security reasons.
Critics argue that allowing this acquisition could have catastrophic consequences for the domestic steel industry and undermine the protectionist measures put in place to safeguard US industries. They claim that enabling foreign companies to acquire US enterprises goes against the purpose of these protective measures.
On the other hand, advocates of the deal argue that it is in everyone's best interests, including the US. They are optimistic about the acquisition gaining regulatory approval.
The steel industry has been in decline for decades, and U.S. Steel is no exception. Despite being once one of the most valuable companies worldwide, the heimische Stahlindustrie (German for domestic steel industry) is struggling.
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