In a significant development, bipartisan opposition is mounting against the proposed $14.1 billion acquisition of US Steel by Nippon Steel, Japan's largest steelmaker. However, experts in foreign investment deals suggest that the opposition may not be enough to block the purchase.

A group of Republican senators, namely JD Vance, Josh Hawley, and Marco Rubio, has called on Treasury Secretary Janet Yellen to establish a panel of US officials to scrutinize and potentially block the takeover due to national security concerns. The senators have expressed alarm over the potential consequences of the deal on the industrial base of the United States, asserting that it was not entered into with US national security in mind.

The senators emphasized that the Committee on Foreign Investment in the United States (CFIUS), chaired by Yellen, should intervene and conduct a review of the deal independently. They argue that this is especially necessary considering that US Steel received competitive bids from American companies, suggesting that a foreign-owned company like Nippon Steel should not be allowed to acquire a vital asset like US Steel.

National security concerns were underscored by pointing out the importance of domestic steel production to the United States. Both Republican and Democratic administrations have taken steps to strengthen the steel industry, further emphasizing the significance of safeguarding the sector.

The senators further contended that Nippon Steel, unlike US Steel, lacks a deep-rooted connection to the United States and has a questionable track record. They highlighted an instance where Nippon Steel was found guilty of unlawfully dumping steel products in the United States, raising doubts about the company's commitment to fair trade practices and the American steel industry.

Ohio Senator Sherrod Brown, a Democrat, has also expressed opposition to the deal, asserting that a foreign company should not have the ability to acquire a major American steel manufacturer without considering the voices of union workers. Brown recommended that if US Steel were to be sold, it should be purchased by Ohio-based Cleveland Cliffs, which had previously attempted to buy US Steel with the support of the United Steelworkers union.

Democrat Senator Joe Manchin from West Virginia strongly criticized the sale of US Steel to a foreign rival, labeling it a "major blow to the American steel industry" that poses a direct threat to national security. Highlighting increased competition from unfair trade practices, Manchin emphasized the urgent need to prevent the further erosion of American ownership in crucial manufacturing sectors.

The proposed acquisition has also drawn opposition from Democrat Senator John Fetterman of Pennsylvania and the United Steelworkers union. Fetterman described the deal as "outrageous" and pledged to utilize his platform to block the foreign sale, noting that steel is essential for both national security and the economic stability of steel communities.

However, despite the growing political opposition and objections from the United Steelworkers union, experts have indicated that it is unlikely that CFIUS would block the deal, particularly when it involves a country like Japan, which is a close US ally. Michael Leiter, head of the CFIUS and national security practices at law firm Skadden, Arps, explained that such a move has never been seen before for a Japanese buyer of a US business, even during the height of trade tensions between the two countries. He highlighted the potential diplomatic repercussions if the deal were to be rejected, particularly in light of collaboration on critical issues like China and semiconductor production and supply chains.

Ultimately, the final decision on the acquisition rests with President Biden, regardless of CFIUS' recommendation. Experts believe that Biden is unlikely to act to block the deal, considering the potential impact on relations with Japan and the broader collaboration on important global issues.

Representatives from US Steel did not respond to requests for comment, and Treasury declined to provide any insight at this stage. Meanwhile, US Steel officials have expressed confidence in the deal, highlighting its potential benefits for all parties involved, including the United States. They remain optimistic about obtaining regulatory approval.

US Steel's decline, along with the broader domestic steel industry, has been observed over the past few decades, underlining the significance of the current proposed acquisition and the concerns surrounding it. As the opposition grows, all eyes will be on the developments surrounding the acquisition and the ensuing impact on the US steel industry and national security.