The US government has reportedly told Japan’s top steelmaker that its bid to take over a US rival would pose a national-security risk.
Nippon Steel and US Steel agreed on the deal last December. But it is facing growing bipartisan opposition in the US.
Reuters news agency is reporting that a US interagency body sent a letter to the two steelmakers. It tells them a takeover could disrupt supply chains and create a risk to national security.
Reuters says the letter was sent on August 31 by the Committee on Foreign Investment in the United States. The body is in charge of reviewing the effects of foreign investment on the country’s national security.
Its 17-page document reportedly says Nippon Steel’s acquisition could “lead to a reduction in domestic production capacity.”
The committee claims the transaction could harm steel supplies needed for transportation, infrastructure, construction and agriculture.
Reuters also reports that the Japanese company has sent a letter to the US government proposing a legally-binding national security agreement to address the concerns of President Joe Biden’s administration.
Western media outlets reported on Wednesday that the president is preparing to block the buyout attempt.