National Security Committee Forgoes Decision on U.S. Steel Acquisition

A powerful U.S. national security committee was unable to reach a conclusive decision about whether Japan’s Nippon Steel should be allowed to buy U.S. Steel, according to letters the federal committee sent to the companies and the White House on Monday.

The move by the Committee on Foreign Investment in the United States to forgo a formal recommendation paves the way for President Biden to terminate a $14 billion transaction that became ensnared in election-year politics.

Mr. Biden previously said that U.S. Steel must remain American owned and operated. He is expected to block the deal before leaving office. Still, rebuffing the transaction would be a departure from America’s long-established culture of open investment, one that could have long-term implications for the U.S. economy.

The interagency committee, known as CFIUS, expressed reservations about the deal to the companies in a letter earlier this month. The committee voiced concerns that the transaction could pose a national security threat to the United States by potentially leading to a decline in American steel production because of the other global business considerations that Nippon must weigh.

The Office of the United States Trade Representative has been staunchly opposed to the deal throughout the process, according to people familiar with the developments. Other officials, such as the chair of CFIUS, Treasury Secretary Janet. L. Yellen, have highlighted the national importance of attracting foreign investment.

Ms. Yellen, at an event in Texas this year, declined to discuss U.S. Steel specifically but emphasized the importance of maintaining a climate that welcomes investment.