Kevin O'Leary, president of OLeary Ventures, on the House Speaker's vote to block US steel sales and the future of TikTok.
President Biden The decision to block Nippon Steel's proposed $14 billion acquisition of US Steel was based on national security concerns — a rationale that drew opposition.
Biden announced the decision on Friday after the Committee on Foreign Investment in the United States (CFIUS) deferred a decision to the president because the committee did not reach consensus in its review. The president's order cited “credible evidence” that Nippon Steel “may be taking actions that threaten the national security of the United States” — though the order did not detail those concerns.
In a statement, Biden explained that “a strong domestically owned and operated steel industry is a critical national security priority,” adding that he “will never hesitate to act to protect this nation's security and its infrastructure, as well as its resilience.” supply chain.”
US Steel and Nippon Steel released a statement condemning the decision Block the transaction It called it “illegal” and said the commitments made by Nippon Steel would strengthen national security. The companies noted that they have proposed banning the transfer of any production and jobs outside the United States, as well as giving CFIUS the ability to veto any production cuts at U.S. steel facilities over the next 10 years to address concerns about steel supply and its impact. be reduced About national security
President Biden blocks US steel sales to NIPPON Steel
US Steel has warned that it may be forced to close its facilities if its acquisition by Nippon Steel fails. (Photo: Justin Merriman/Bloomberg via Getty Images/Getty Images)
However, they said that CFIUS “has not given due consideration to a mitigation proposal presented … as demonstrated by the absence of any written feedback to the Big Four.” National security Agreements that the parties actively offered for more than 100 days.” The companies added that “the CFIUS process was deeply tainted by politics and the outcome was predetermined, without consideration of the merits, but to satisfy Biden-White's political agenda. home.”
Nippon Steel also pledged to invest at least $2.7 billion to modernize its U.S. steel plants near Pittsburgh and Gray Works in Indiana to better compete with international rivals. U.S. Steel CEO David Britt previously said The Wall Street Journal The company can't do that if the deal falls through because “I don't have the money.”
The two companies said in a statement Friday that they continue to believe the deal “is the best way to ensure that US Steel, and in particular its facilities represented by USW, will be able to compete and thrive well into the future.” American steel and Nippon steel He added: “They will take all necessary measures to protect our legal rights and secure this future.”
| ticker | security | the last | change | change % |
|---|---|---|---|---|
| X | United States Steel Co | 30.46 | -2.14 |
-6.56% |
| NPSCY | Nippon Steel Company | 6.917 | -0.05 |
-0.76% |
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This decision was praised by the White House Union of Steel Workers (USW). David McCall, president of USW International, said Nippon is a “serial trade cheat who has undermined our domestic industry for decades by dumping its products on our market”.
He added that the purchase would allow Nippon to “destabilize our trading system from within” while “reducing our ability to meet our national security and critical infrastructure needs.”
“It's clear from US Steel's recent financial performance that it can easily remain a strong and resilient company. We now call on US Steel's board to take the necessary steps to make it more prosperous and profitable,” McCall said.
US Steel and Nippon Steel announced plans to take action to protect their legal rights. (Justin Merriman/Bloomberg via Getty Images/Getty Images)
Scott Lincome, vice president of public economics and the Cato Institute's Stifel Center for Business Policy, noted in a blog post that the deal was made by a Independent jury Chosen by US Steel and USW, as well as 98% of US Steel shareholders when the transaction was voted on.
Lincom pointed out The Treasury, State and Defense departments have concluded that the deal poses no security risk, and many independent experts in national security and foreign policy see the deal as a way to strengthen national security and relations with close ally Japan.
He added that while the companies may eventually win a legal challenge against Biden's decision to proceed with the deal, the president's action “risks damaging the US investment review process; US-Japan relations; “The United States is positioned as a welcoming place for America.” The general rule against using “national security'' as a cover to favor policy and support the U.S. economy, unfortunately, cannot reverse either.
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President Joe Biden blocked the deal citing national security reasons. (Ron Sachs/CNP/Bloomberg via Getty Images/Getty Images)
Alexis Earley, a Jenner & Block partner whose practice includes focusing on CFIUS matters, said in a statement that “the decision appears to be political and Economic securityAnd serious and intractable national security concerns don't bolster it.”
He also noted that the decision could undermine efforts to strengthen ties with a close ally that are needed to help counter China's growing influence. Japan is a party to a mutual defense treaty with the United States and has been a vital partner in economic and defense initiatives.
He added: “Low-risk foreign investors will think twice before voluntarily placing themselves in such an arbitrary and unaccountable process.” “As the daughter of a Pennsylvania steelworker and a CFIUS attorney, I watched this deal closely. CFIUS was diverted from its primary national security responsibility by focusing on a subset of economic criticisms.”
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Jason Furman, professor of economic policy at Harvard who chaired the Council of Economic Advisers President Obama The second round also disagreed with the Biden administration's decision to block the deal.
Foreman wrote in a post on X: “For President Biden to claim that Japan's investment in an American steel company is a threat to national security is a pitiful pandering to special interests that will make America less prosperous and less secure.” See him betraying our allies by abusing the law.”