Let the watchdogs decide if a foreign U.S. Steel sale works for America

Let the watchdogs decide if a foreign U.S. Steel sale works for America

Last week, Nippon Steel's $14 billion buy offer was accepted by U.S. Steel. Some people in Congress and the steel maker's union want to stop the deal because of national security reasons. This would create a bad example and put America's ability to make things and prepare for defense at risk.

There's growing agreement between both parties to find an American buyer for U.S. Steel. Cleveland-Cliffs, based in Ohio and liked by many people was unsuccessful with their offer last summer. Esmark and Nucor, who were said to be looking at U.S. Steel too, complete the list of top choices.

But, it is not clear why any of these companies would want to buy U.S. Steel for their business needs.

In terms of Cleveland-Cliffs, Esmark’s CEO put it this way: "If you mix a dinosaur with another one, it will still be a type of dinosaur."

When it comes to Esmark and Nucor, experts think that neither one can save money from U.S. Steel in America all by themselves.

However, people in Congress are not looking for a business reason. They're using politics during election year to sell a famous American factory from an important deciding state. Chosen leaders have no danger in speaking about the need to let the deal be checked by a group called Committee on Foreign Investment in America. President Joe Biden wants a deep look. Some in Congress have already figured it out for themselves.

Senator Sherrod Brown from Ohio said in a letter to President Biden that it would be wrong for the U.S. Steel company to sell out and go with any overseas business partner at all.

Similarly, Senators Bob Casey (D-Pa.) and John Fetterman (D-Pa.), along with Representative Chris Deluzio (D-Pa.) have said that "American businesses made offers which wouldn't cause our security worries to come true."

On the other side, senators Marco Rubio (R-Fla), J.D vance (r - Ohio) and Josh Hawley explained to Treasury Secretary Janet Yellen who heads the Committee on Foreign Investment in United States, that it's not good for U.S Steel owned by a foreign country even if they are ally because this causes deep concerns

The chance of the deal being accepted is about 70%. Several considerations loom large. One reason is that Cleveland-Cliffs CEO thinks his company avoided a problem by not getting U.S. Steel and he doesn't want to be one of those "clear choices" for keeping American ownership alive. Another, the State Defense Committee in America has wide power to consider national safety issues from taking over an investment as it believes necessary.

In 2014, President Biden gave an order about how the committee could check and see what new or changing threats there are to national security. The order says that working with other countries who may need help is very important for making sure supply chains keep running smoothly in America. But it also said we have to make choices carefully so foreign investors do not hurt our plans of keeping things safe from

You can understand the idea behind this order from how many times words like "threat" or "danger" are used. The main concern is that buying something could let foreign people or groups cause harm to national safety, not because being owned by them would threaten all existence everywhere on earth itself.

This brings us back to Nippon Steel. The firm promises to keep Steel in Pittsburgh, respect the current labor deal with U.S., and help it lower its carbon emissions by using small mills more often. How does this chance or help Japan make a danger to their country's safety?

Also, the order praises investment that is open as a way to make American companies better and help with "resilience" in supply chains. How does Nippon Steel buying U.S. Steel not meet these two goals?

The deal involves a mix of making friends with others and working closer to home, but in the opposite way. A company from Japan wants to put money into an important part of American manufacturing and security readiness. If this causes a hold-up issue, then U.S . Steel is doing business in empty space instead of being part of worldwide supply chains.

This does not mean that the Committee on Foreign Investment in the United States should stop working to give President Biden what he wants — "serious review" of this deal. The bosses should be careful with their words about the deal, not just because friends are watching. They need to watch what they say in front of enemies like China too.

Vance said that "U.S. Steel's future will be important for the future of American steel business." He was correct. But it's just nationalism to say that Nippon Steel, as a foreign buyer can not help in this future too.