Biden economic adviser says US Steel sale deserves ‘serious scrutiny’

Lael Brainard, director of President Biden’s National Economic Council, said Thursday that the sale of U.S. Steel Corp. to Japan’s Nippon Steel “appears to deserve serious scrutiny” amid backlash over the acquisition.

“The President believes U.S. Steel was an integral part of our arsenal of democracy in WWII and remains a core component of the overall domestic steel production that is critical to our national security. And he has been clear that we welcome manufacturers across the world building their futures in America with American jobs and American workers,” Brainard said in a statement from the White House.

“However, he also believes the purchase of this iconic American-owned company by a foreign entity—even one from a close ally—appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.”

Nippon Steel, already one of the top producers of the material, announced this week it’s acquiring U.S. Steel Corp. — the Pittsburgh company once the biggest in the world — in a $14.9 billion deal.

But the sale has drawn the ire of lawmakers in both parties as some sound alarms about how the move could shift steelworking jobs to low-wage states, threaten national security and undermine U.S. industry.

A group of Republican senators wrote to Treasury Secretary Janet Yellen this week to argue the Committee on Foreign Investment in the United States (CFIUS) should block the sale.

CFIUS is an interagency panel chaired by the Treasury secretary with the power to block the acquisitions of U.S. companies by foreign firms if the deal could threaten national security.

Brainard did not explicitly call for a CFIUS investigation but said the sale of U.S. Steel “looks like the type of transaction” that the panel was established to investigate.

Democratic Sen. Joe Manchin (W.Va.) said in a statement that “this is a major blow to the American steel industry which has been instrumental in making us the superpower of the world and a direct threat to our national security.”

“This looks like the type of transaction that the interagency committee on foreign investment Congress empowered and the Biden Administration strengthened is set up to carefully investigate,” Brainard said in the Thursday statement, adding the Biden administration “will be ready to look carefully at the findings of any such investigation and to act if appropriate.”