In today’s highly partisan environment at home and abroad, the temptation to abandon good judgment and fidelity to constitutional norms is especially acute.
John Adams famously said that the Founding Fathers created “a government of laws, not of men.” But as governments gain more and more power over nearly every aspect of our lives and economies, our vital respect for constitutional freedoms is increasingly under threat.
The recent unnecessary controversy surrounding the proposed takeover of US Steel by the Japanese company Nippon Steel Corporation provides the latest example. some reminders There is a risk that the executive branch will overstep its proper authority and put the economy and global security at greater risk.
Opponents of the deal on both the political left and right say the Committee on Foreign Investment in the United States (CFIUS), an interagency committee with jurisdiction to review foreign investment in U.S.-based assets, has urged President Biden to block the deal. They suggest that they should be advised to do so. Action will be taken based on “national security reasons.”
That would be a violation of the proper role of CFIUS. CFIUS serves a vital but narrow national security purpose and should not be used to pursue economic interests or to politicize the merits of acquisitions beyond its legal authority.
By way of background, the last major Congressional review of CFIUS’ legal authority occurred in 2018, and Congress Foreign Investment Risk Examination Modernization Act (FIRRMA). This law expanded CFIUS’ authority to address potential transfers of sensitive national security technology from the United States to foreign companies, particularly those with ties to the Chinese Communist Party.
At that time, many members of parliament… guided Led primarily by Democratic New York Sen. Chuck Schumer, it wanted to further expand CFIUS’ authority to also consider broader economic competitiveness factors when evaluating foreign investment transactions.
In other words, they want to include arguable economic claims rather than actual national security threats as a basis for blocking a proposed deal, whatever the national security implications. It was.
Congress wisely rejected that very broad proposal and settled on much narrower reforms focused on technology transfer.
Therefore, even under the revised authority, CFIUS must prove that a foreign company’s acquisition of an American company threatens our nation’s “critical infrastructure.” Define “These are systems and assets, whether physical or virtual, that are of critical importance to the United States, and the neutralization or destruction of such systems and assets would have serious national security implications.”
This is why it is important for the proposed Nippon Steel/US Steel agreement.
No matter how you look at it, Nippon’s acquisition certainly does not meet that standard and does not pose even the most remote threat to national security. Therefore, from a strictly legal perspective in accordance with the underlying law, CFIUS should allow this transaction.
But in addition, if we allow this transaction, Strengthen It does not threaten the national security of the United States. Together, U.S. Steel and Nippon Steel will be the world’s second-largest steel producer, allowing the U.S. and Japan to jointly compete more favorably with China’s world-leading Baowu Group.
Japan is clearly one of the United States’ most loyal and long-standing treaty allies, with mutual defense agreements based on the 1960 Japan-U.S. Security Treaty. Additionally, more U.S. troops are stationed in Japan than any other country on earth, and the country remains a cornerstone of U.S. security cooperation in the Indo-Pacific region.
Perhaps most importantly, Japan and the United States also share deep and well-founded concerns about China’s unprecedented military buildup and increasingly belligerent behavior.
Therefore, it is untenable to portray this proposed cooperation between private companies in the two countries as anything other than a positive development, especially in this capital-intensive industry in which the United States is struggling.
The U.S.-Japan relationship at the heart of the proposed agreement should serve as a model for intelligent competition with China, and we should only allow a trade relationship that allows us to keep pace with the “factories of the world.” Instead, they should be actively encouraged.
Sudden efforts to overstep CFIUS’ authority therefore risk chilling profitable foreign investment in favor of capture by domestic special interests. Far from undermining U.S. national security interests, the new U.S.-Japan Steel Agreement strengthens U.S. geopolitical security and will ensure that those who seek to abuse CFIUS’s authority endanger that authority. we cannot forgive.
Jeffrey Mazzella is the president of the Center for Personal Freedom.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.
