In a significant move that underscores the ongoing concerns regarding national security and foreign investments in critical industries, President Joe Biden issued an order on January 3, 2025. This directive specifically prohibits the acquisition of the United States Steel Corporation by Nippon Steel Corporation (NPSCY), Nippon Steel North America, Inc., and the 2023 Merger Subsidiary.

The Presidential order elaborates on Biden's commitment to safeguarding U.S. interests, stating, “In that order, I reserve the right of the President to issue further orders with respect to the Purchasers or U.S. Steel as shall in my judgment be necessary to protect the national security of the United States.” This remark highlights the executive branch's active role in regulating foreign investments that may pose risks to national safety.

Supported by the legal framework provided under Article II of the U.S. Constitution and the Defense Production Act of 1950, Biden’s order calls upon the Committee on Foreign Investment in the United States (CFIUS) to undertake a thorough review of the proposed acquisition. CFIUS is tasked with scrutinizing foreign investments to determine their effects on national security. In this case, the committee will analyze whether the acquisition by Nippon Steel could lead to potential security risks.

Biden's memorandum specifies that within 45 days of its issuance, CFIUS is required to submit a comprehensive recommendation detailing whether any proposed measures by Nippon Steel and its subsidiaries are adequate to mitigate the identified risks. The recommendation will also need to incorporate the perspectives of each member agency within CFIUS, along with their justifications for their respective stances on the matter.

This incident is part of a broader trend where the U.S. government has become increasingly vigilant about foreign acquisitions, particularly in industries deemed crucial for national infrastructure and security. The steel industry, being pivotal for various sectors, including defense and construction, remains under close scrutiny by policymakers who are wary of foreign influence.

As the market evolves, investors are advised to stay informed about such regulatory developments that could potentially impact stock values. They can utilize resources like Tipranks' Stock Screener to filter, analyze, and streamline investment opportunities effectively.