Panel reviewing US-Japan steel deal hits impasse

A panel reviewing whether the acquisition of US Steel by Japan's Nippon Steel would pose national security risks has hit an impasse, heightening prospects that President Joe Biden will block the $14.9 billion deal, the Financial Times reported Sunday.

The US Treasury notified both sides that the nine agencies making up its Committee on Foreign Investment in the United States (CFIUS), which vets such acquisitions, were struggling to reach consensus as a December 23 deadline looms to make a recommendation to Biden, the outlet reported.

Biden, like President-elect Donald Trump, has criticized the proposed buyout, a deal strongly opposed by American labor unions.

US Steel is based in Pennsylvania, a state considered key to victory in the presidential election last month.

Division among the CFIUS agencies would make it easier for the president to quash the deal, while the panel's unanimous backing would require Biden to find other grounds to block it.

The proposed acquisition of the iconic US steelmaker was first announced last December and had been expected to be finalized by this year's third quarter.

The FT, citing unidentified US officials, reported that the Treasury, Defense and State departments had concluded that the deal posed no national security risk.

The "main opposition," it said, has come from US trade representative Katherine Tai who, according to the sources, was unmoved even by a draft from CFIUS showing how Nippon Steel could act to alleviate any concerns.

Biden insists the steel industry holds a strategic role for the United States, now the world's leading steel importer.

The United Steelworkers union vigorously opposes the takeover, though the Japanese group has promised not to cut jobs or close any US Steel sites for at least two years.

In a statement Wednesday, Nippon Steel deplored what it said was the "inappropriate" influence of politics in the decision process, adding that the deal would "bolster American economic and national security by countering the threats posed by China."

"It is inappropriate that politics continue to outweigh true national security interests -- especially with the indispensable alliance between the US and Japan as the important foundation," the Japanese corporation said.

A former CFIUS official told the FT that if the trade representative helps block the deal it would be "a huge geostrategic misstep," forcing the US "to put in writing that Japan is a national security threat, which is simply untrue and detrimental to American security."