The White House is facing criticism for its handling of the review process regarding Nippon Steel's potential acquisition of U.S. Steel. According to sources familiar with the matter, the Biden administration is likely to delay making a final decision on whether to block the sale until after the election, a move that has raised concerns of political influence on national security matters.

Both Democrats and Republicans, including President Biden, Vice President Kamala Harris, and former President Donald J. Trump, share the belief that Nippon Steel's $15 billion bid to take over U.S. Steel should not proceed, advocating for the preservation of American ownership and operation of the company. However, the possibility of blocking the deal prior to the election has drawn backlash from business groups and legal experts who argue that political interests are interfering with the intended focus on national security.

A spokesperson for the White House clarified that a decision to block the deal was never imminent because the Committee on Foreign Investment in the United States (CFIUS) had not provided President Biden with a recommendation. The spokesperson emphasized that the President remains committed to keeping U.S. Steel domestically owned and operated, stating, "The president's position is that it is vital for U.S. Steel to remain an American steel company that is domestically owned and operated."

The initial announcement of the transaction in December sparked a public dispute between the steelworkers union and U.S. Steel. While the steelworkers union opposes the deal, U.S. Steel argues that it would serve as a financial lifeline for the company. U.S. Steel executives have warned that blocking the deal could result in job cuts and the relocation of the company's headquarters from Pennsylvania.

Recent indications from administration officials suggested that the interagency panel responsible for the review was preparing to advise President Biden to block the deal, citing concerns over its potential impact on the U.S. steel industry and supply chains. However, legal experts question the viability of these arguments, pointing out that Japan is a close U.S. ally and blocking the deal on such grounds could invite litigation. Japanese officials have expressed objection to the idea that the United States would invoke national security as a reason to block the agreement.

While the steelworkers union vehemently opposes Nippon Steel's bid, Democratic lawmakers, including senators from Ohio and Pennsylvania, have urged President Biden to halt the transaction. The United Steelworkers union commended the White House's support for their cause.

Top executives from Nippon Steel and U.S. Steel recently met with Biden administration officials involved in the review process in a last-ditch effort to salvage the agreement. Both companies have reportedly requested to withdraw their applications with CFIUS, hoping to buy more time for a review and address the government's concerns. Whether this request will be granted remains uncertain, but such a move would allow the review process to continue into later this year.

Officials from the State and Defense Departments reportedly harbor reservations about blocking the agreement, and Treasury Secretary Janet L. Yellen, the chairwoman of CFIUS, has emphasized the importance of foreign direct investment to the economy. Ultimately, if the committee remains divided on the deal, it will be up to President Biden to make the final determination.

The potential consequences of blocking the deal, including potential job losses, further complicate the political landscape surrounding this decision. Governor Josh Shapiro of Pennsylvania, a Democrat, criticized U.S. Steel for its job-cut threats, expressing his support for the steelworkers union while highlighting the importance of preserving jobs in the state.

Representatives for both U.S. Steel and Nippon Steel declined to comment. According to a report from The Washington Post, the Biden administration plans to delay a decision on the case. With the issue continuing to generate controversy, the outcome of this review process remains uncertain.