The Committee on Foreign Investment in the United States (CFIUS) is a cornerstone of America’s national security apparatus. Its mandate is to scrutinize foreign acquisitions for genuine threats to U.S. security, balancing economic openness with strategic caution.
However, recent events surrounding Nippon Steel's proposed $15 billion acquisition of U.S. Steel raise alarming questions about the influence of political interests on this crucial process. At the center of this controversy is Katherine Tai, the U.S. Trade Representative, whose proximity to Cleveland-Cliffs raises doubts about the impartiality of the review.
The role of USTR in CFIUS deliberations is vital yet sensitive. Trade policy intersects with national security in complex ways, requiring objectivity and adherence to facts.
Reports indicate that the Pentagon, Treasury, and State Department — all integral to CFIUS — have found nonational security risks associated with Nippon Steel’s acquisition. Yet, political objections, particularly from Tai and the Commerce Department, appear to be steering the review.
Notably, Tai’s documented visits to Cleveland-Cliffs’ facilities and her alignment with their corporate agenda suggest a troubling entanglement of public duties with private interests.
This entanglement undermines the credibility of CFIUS. The committee’s primary task is to evaluate risk, not to arbitrate domestic economic policy or appease politically connected corporations.
Nippon Steel’s acquisition of U.S. Steel offers a pathway to economic benefits without compromising national security. Unlike Cleveland-Cliffs’ heavily criticized attempts to consolidate market power, Nippon’s track record demonstrates a commitment to responsible corporate governance and investment.
The proposed deal could enhance competition, benefit American workers, and reduce domestic concentration in the steel industry.
The consequences of politicizing CFIUS extend beyond this transaction. If foreign investors perceive the U.S. as hostile to objectively beneficial transactions, they may divert their investments to other markets.
This chilling effect would harm American economic interests and weaken key industries that rely on global capital and expertise. Moreover, leveraging CFIUS for partisan ends risks eroding trust in its impartiality, making it less effective in identifying and mitigating real national security threats.
Transparency is essential to preserving the legitimacy of CFIUS. Public confidence in the committee hinges on the belief that its decisions are guided by evidence, not political expedience.
To safeguard this credibility, Congress should demand an investigation into potential conflicts of interest in the Nippon Steel review, including the role of Katherine Tai and other officials with ties to Cleveland-Cliffs. Such oversight is not only warranted but necessary to protect the integrity of U.S. foreign investment policy.
In a global economy, protecting national security and fostering economic growth are not mutually exclusive. By ensuring that CFIUS operates independently and objectively, the United States can maintain its leadership in both arenas.
The Nippon Steel case should serve as a reminder of the perils of politicizing national security tools and the importance of adhering to principled decision-making.
Mitchell Brown is an Army veteran with extensive experience as a linguist, intelligence collector, and reconnaissance asset. Mitchell eventually took a legislative role in the U.S. House of Representatives, where he began his work on policy for the chairman of the Committee on Homeland Security. Mitchell was subsequently appointed to serve as deputy White House Liaison for the Department of Labor for the Trump administration. Mitchell was tasked with leading in lowering the unemployment rate during the COVID-19 pandemic. Read Mitchell Brown's Reports — More Here.