Nippon Steel's proposed $14.9 billion takeover of U.S. Steel would create national security risks because it could hurt the supply of steel needed for critical transportation, construction and agriculture projects, the United States government said in a letter sent to the companies.
The letter also cited a global glut of cheap Chinese steel, and said that under Nippon Steel, a Japanese company, U.S. Steel would be less likely to seek tariffs on foreign steel importers.
The Committee on Foreign Investment in the U.S. (CFIUS) said in its 17-page letter sent on Saturday to Nippon Steel and U.S. Steel that decisions by the Japanese steelmaker could "lead to a reduction in domestic steel production capacity."
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