McLernon: Japan Is a Strategic Ally, CFIUS Exists for a Reason

Urges Administration to Keep Politics Out of Cross-Border Investment Reviews

WASHINGTON, D.C. – Nancy McLernon, president and CEO of the Global Business Alliance (GBA), has issued the following statement in response to news reports (Financial Times and the Washington Post) that President Biden will soon announce concerns over Nippon Steel’s acquisition of U.S. Steel:

“The CFIUS process was designed by Congress to thoroughly review cross-border deals for their potential impact on national security and, importantly, to remain apolitical. Only once all of the facts are uncovered through this process can a determination be made. To stay globally competitive for foreign direct investment, which now employs nearly eight million American workers, the Administration should adhere to this standard.”

Find below some statistics and contextual information: 

Japan is a strategic partner that contributes heavily to America’s prosperity, providing countless good-paying American jobs.

  • Japan is the United States’ top investor, contributing 15 percent of America’s total cumulative foreign direct investment.
  • Over the past five years, Japan increased its investments into the U.S. by 55 percent, making the country the fourth-fastest-growing country for FDIUS.
    • In 2022 (latest available BEA data), Japan invested $775 billion compared to $499 billion in 2017.
  • International companies directly employ nearly eight million American workers. Japanese-headquartered companies in the U.S. alone support 963,400 American jobs – that’s 12 percent of the entire FDI workforce in the U.S.

Nippon Steel Already Has a Long-Standing History of Operating in the U.S.

  • Nippon Steel has operated in the U.S. for nearly four decades.
  • It has invested in eight steel companies in the U.S.
  • Around 4,000 Americans are employed by Nippon Steel.
  • Nippon Steel’s top executives have been quoted about their confidence in America’s economy and workforce.
    • “Our investment reaffirms the strength of the U.S. economy, the value of American employees, and the ability of the U.S. steel industry to compete globally. The U.S. and Japan benefit from an alliance that advances shared values, and our two companies can do the same.”

American Steel Workers Thrive Thanks to International Companies in the U.S.

  • International companies contribute significantly to the iron and steel mill sector, making up 24 percent of the total workforce in 2021.
  • American iron and steel mill workers employed by international companies on average earn higher wages, with an average of $114,555 compared to the overall U.S. average of $103,631; that’s 10 percent higher.

A non-national-security decision would be contradictory to the Biden-Harris Administration’s Open Investment Policy and out of line with broad political support.

  • President Biden issued a strong Open Investment Policy Statement during the first year of his administration in June 2021.
    • “The Open Investment Policy of the United States is a pledge to treat all investors fairly and equitably under the law… I want to reiterate my administration’s commitment to ensuring that the United States remains the most attractive place in the world for businesses to invest and grow, thus creating jobs here at home, strengthening supply chains across the country, and deepening our relationships with allies and partners.”
  • According to YouGov, more than three-quarters of Americans (76%) “consider [Japan] to be an ally” of the United States.