A cohort of business groups in Washington warned in a letter Wednesday that “political interference” threatens to derail the Japanese steelmaker Nippon Steel’s proposed acquisition of U.S. Steel, which is opposed by both presidential candidates and lawmakers across the political spectrum.
“Unfortunately, there have been persistent attempts recently to politicize the committee’s work from across the political spectrum, allowing politics to undermine the clear and narrow statutory mandate of national security,” the business groups warned in a Wednesday letter to Treasury Secretary Janet Yellen, who chairs the Committee on Foreign Investment in the United States (CFIUS), which is reviewing the deal.
“We fear that the CFIUS process is being used to further political agendas that are outside the committee’s purview and putting the U.S. economy and workers at risk. Indeed, America’s investment climate will be severely tarnished if such political interference prevails,” the groups, including the U.S. Chamber of Commerce, the Global Business Alliance, Alliance for Automotive Innovation and the Japan Business Federation wrote.
The deal is reportedly on the ropes, with Reuters reporting that CFIUS sent letters Saturday to Nippon Steel and U.S. Steel that said the $15 billion takeover carried national security risks including the potential influx of cheap steel from China and harm to the domestic steel supply.
The Nippon Steel vice chair is expected to make an 11th-hour plea to save the deal to senior U.S. officials Wednesday, the Financial Times reported.
Neither the CFIUS nor Nippon Steel responded to requests for comment.
U.S. Steel President and CEO David Burritt warned last week that it may have to cut staff and move its headquarters out of Pittsburgh if the deal falls through, citing promised investments from Nippon Steel that the company would not be able to make on its own.
Lawmakers on both sides of the aisle, including Pennsylvania Sens. Bob Casey (D) and John Fetterman (D), were swift to denounce the deal when it was announced in December as a threat to national security that would undermine American industrial capacity.
President Biden and Vice President Harris have both said they oppose the deal, as has former President Trump, the GOP nominee for president.
The business groups expressed their concerns about the “political pressure” on the process, writing in the letter, “CFIUS should never become a tool for political posturing and should not morph into industrial policy masquerading as national security.”