Mrvan, Banks urge Treasury to keep steel industry American-owned

The Committee on Foreign Investment in the United States is now taking a second look at Nippon Steel's $14.9 billion acquisition of U.S. Steel. It has been a protracted saga that has resulted in big promises, barbed threats, extensive litigation and bipartisan political opposition.

And now, U.S. Rep. Frank Mrvan, D-Highland, and U.S. Sen. Jim Banks, R-Indiana, have joined together to lobby the U.S. Department of the Treasury to keep the American steel industry domestically owned. The lawmakers sent a bipartisan letter to U.S. Treasury Secretary Scott Bessent, chairman of CFIUS, to urge him to preserve domestic ownership on national security grounds.

"We write to express our belief that a strong, domestically owned and operated American steel industry is vital to our national security," they wrote. "If American steel production does not remain robust in peacetime, we risk unreliable supplies of critical steel products to the military in wartime. We urge you to consider this as the Department of Treasury assesses the national security risks in any review of foreign direct investment."

CFIUS consists of representatives of the departments of the Treasury and the Justice, Homeland Security, Commerce, Defense, State and Energy departments, as well as of the offices of the U.S. Trade Representative and Science & Technology Policy. The committee ruled last year that allowing a foreign buyer to acquire U.S. Steel could erode domestic steelmaking, putting the United States at the mercy of foreign companies if it needed to ramp up production.

President Joe Biden blocked the deal, which Nippon Steel said would result in nearly $1 billion in investment in Gary Works which the United Steelworkers union fears will further shift production away from integrated mills in the long term.

President Donald Trump ordered a fresh review of the proposed sale but has said repeatedly before and since he does not want a foreign owner to take over U.S. Steel, but has also said he'd be willing to help negotiate a sale of a minority stake.

Mrvan and Banks write that foreign ownership of U.S. Steel could hurt domestic supply chains that could be critical to supplying the military.

"Permitting foreign ownership or control of our steel industry risks ceding critical supply chains to foreign companies whose commercial interests may not always align with our national security interests," they wrote. "We should not entrust companies that have repeatedly circumvented our trade laws and have dumped large volumes of steel onto our shores with sustaining U.S. steel production capacity and rigorously defending U.S. trade remedy law."

They pointed to recent supply chain disruptions that have rippled through sectors like semiconductors, electronics, medical and automotive, resulting in shortages and higher prices.

"While the Treasury and the Department of Defense have extensive legal authorities to prioritize production for national defense, the experiences during the Tohoku earthquake and tsunami and the COVID-19 pandemic demonstrate the difficulties of requisitioning products that are unavailable and the protracted delays involved in starting up new production lines amid a crisis," they wrote. "In other words, once manufacturing capacity is gone, it is very hard to get back."