Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel is facing mounting regulatory and political opposition, with concerns over national security, domestic manufacturing, and foreign ownership casting uncertainty over the deal’s approval.
The acquisition, which would make Nippon Steel one of the world’s largest steel conglomerates, is now under intense scrutiny from U.S. lawmakers, labor unions, and national security officials. As government regulators review the transaction, the fate of the deal remains in question amid heightened scrutiny of foreign investments in strategic industries.
National Security Concerns and Regulatory Review
A key focus of the review process is the Committee on Foreign Investment in the United States (CFIUS), the federal body responsible for evaluating foreign takeovers of American companies. CFIUS is assessing whether the deal poses risks to U.S. national security, particularly given U.S. Steel’s role as a key supplier to the defense sector, shipbuilding, and critical infrastructure projects.
Opponents of the deal argue that placing an iconic American steelmaker under foreign ownership—particularly one that supplies materials for military applications—could threaten national security by disrupting domestic supply chains and reducing U.S. control over essential manufacturing.
“There’s a reason we have protections around industries critical to national security,” said Senator Sherrod Brown (D-OH). “This deal risks putting American workers and American interests second to foreign priorities.”
Labor and Political Resistance
Beyond national security concerns, U.S. steelworkers’ unions and industry advocates have voiced strong opposition, warning that the acquisition could lead to job losses, outsourcing, and weakened worker protections.
The United Steelworkers (USW), the largest union representing American steelworkers, has called on the Biden administration to block the transaction, emphasizing the importance of maintaining domestic control over a strategic industry.
“American steel should be made by American workers, not controlled by foreign corporations with their own interests in mind,” said USW President David McCall.
Political opposition to the deal has also intensified, with figures across the political spectrum weighing in. Former President Donald Trump, a longtime advocate for domestic steel production, labeled the deal a “disaster” and indicated that, if re-elected, he would move to block foreign acquisitions of U.S. strategic industries.
Nippon Steel’s Reassurances
Despite the growing backlash, Nippon Steel has defended the deal, arguing that its acquisition would strengthen, rather than weaken, U.S. Steel’s position. Company executives have pledged to maintain jobs, invest in modernizing facilities, and uphold existing military contracts.
“We are fully committed to growing U.S. Steel’s operations, protecting American jobs, and ensuring the company remains a global leader in steel production,” said a Nippon Steel spokesperson.
Proponents of the deal argue that foreign investment could help modernize aging U.S. steel plants, enhance efficiency, and bolster the company’s competitiveness on the global stage. They also point out that Japan is a longstanding U.S. ally, making Nippon Steel’s ownership far less concerning than a takeover by companies from adversarial nations such as China or Russia.
What Comes Next?
The CFIUS review process is expected to extend into 2025, with potential legal challenges, political interventions, or renegotiations to address security concerns.
If CFIUS blocks the transaction, Nippon Steel may be required to offer additional security assurances, alter the terms of the deal, or abandon the acquisition altogether. On the other hand, if the deal is approved, it could significantly reshape the global steel industry, solidifying Nippon Steel’s dominance in the sector.
The outcome of this regulatory battle is likely to influence future foreign investment policies in the U.S., particularly as protectionist sentiments gain traction in Washington. With the 2024 election results shaping the political landscape, the final decision on the deal could set a precedent for how future foreign acquisitions in critical industries are handled.
For now, the fate of U.S. Steel—and its role in America’s industrial and national security landscape—remains uncertain as the regulatory showdown continues.
