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The
deal faces opposition from numerous Democrats and Republicans,
with Vice President and Democratic presidential candidate Kamala
Harris saying on Monday she wants U.S. Steel to remain "American
owned and operated." Her Republican rival Donald Trump has
pledged to block the deal if elected.
In the letter, which has not been previously reported, the
Committee on Foreign Investment in the United States (CFIUS)
said the deal would damage American steel production and
decrease the likelihood that U.S. Steel would continue to
aggressively seek trade remedies, the people who were familiar
with the matter said, adding that the companies were given until
Wednesday to respond.
"The committee has identified risks to the national security of
the United States arising as a result of the transaction," the
letter said, according to one of the sources.
In their written response, excerpts of which were shared with
Reuters, the companies echoed concerns revealed publicly by U.S.
Steel on Wednesday. "Rejection of this transaction will lead to
the idling of U.S. Steel's blast furnace facilities; ... likely
cost thousands of jobs; and ultimately weaken the quality and
resiliency of steel supply to U.S. industries."
The U.S., they added, was "acting in this matter not on the
basis of the facts, the law, or the United States national
security interests, but on the basis of politics and the cynical
exploitation thereof by third parties."
The White House declined to comment. The Treasury Department,
which leads CFIUS, did not respond to a request for comment.
Spokespeople for Japan's Nippon Steel and U.S. Steel declined to
comment on the letter but referred Reuters to prior statements
arguing that the deal does not create any national security
concerns and would strengthen the U.S. steel industry.
"We fully expect to pursue all possible options under the law to
ensure this transaction, which is the best future for
Pennsylvania, American steelmaking, and all of our stakeholders,
closes," the spokesperson for U.S. Steel added.
Nippon Steel shares were up 0.8% around midday on Thursday. U.S.
Steel shares closed down 17.5% on Wednesday.
(Reporting by Alexandra Alper; Editing by Chris Sanders, Anna
Driver and Muralikumar Anantharaman)
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