The Biden administration is likely to delay a final decision on whether to block the sale of U.S. Steel to Nippon Steel of Japan until after the election, slowing a process that has been caught up in presidential politics, according to people familiar with the matter.
Top Democrats and Republicans, including President Biden, Vice President Kamala Harris and former President Donald J. Trump, have been in agreement that Nippon’s $15 billion bid to take over U.S. Steel should not move forward and that the company should remain American owned and operated.
However, the prospect that the deal would be blocked before the election drew backlash from business groups and legal experts who feared that political interests were tainting a process that is intended to be focused on national security.
The transaction, which was announced in December, has been undergoing a review by the Committee on Foreign Investment in the United States. Administration officials signaled last week that the interagency panel was preparing to advise that Mr. Biden block the deal because it posed a threat to the U.S. steel industry and supply chains. The committee also expressed concerns that Nippon would not side with the United States in international trade cases related to American tariffs on steel imports.
Legal experts said that those arguments would be hard to justify because Japan is a close U.S. ally and that blocking the deal on such pretenses could lead to litigation.
The powerful steelworkers union has been adamantly opposed to Nippon’s bid, arguing that the company will not honor pension agreements and expressing concerns that it would not keep its promises to invest in facilities in Pennsylvania.
Top executives from Nippon Steel and U.S. Steel met this week with Biden administration officials involved in the review process in a last-ditch effort to salvage the agreement.
According to people familiar with the process, the companies had requested to withdraw their applications with the panel, known as CFIUS, in hopes that they could buy more time for a review and try to mitigate the government’s concerns. CFIUS had not granted that request, but doing so would allow the review process to continue until later in the year.
Officials from the State and Defense Departments had expressed reservations about blocking the agreement, according to a person familiar with the matter. Treasury Secretary Janet L. Yellen, the chairwoman of CFIUS, had avoided speaking publicly about the review process but emphasized during an event last week the importance of foreign direct investment to the economy.
In cases where the committee is divided over a deal, it is up to the president to make a determination.
The White House had no comment. Representatives for U.S. Steel and Nippon Steel did not immediately respond to a request for comment.
The Washington Post reported earlier that the Biden administration intended to delay a decision on the case.
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