Washington Comes for the U.S. Steel Deal

Nippon Steel’s $14 billion bid for U.S. Steel has generated protests from Democratic and Republican lawmakers concerned that an American icon could fall into foreign hands.Credit…Haiyun Jiang/The New York Times

U.S. Steel becomes a national security concern

The hurdles keep multiplying for U.S. Steel’s proposed $14 billion sale to Nippon Steel of Japan.

Lawmakers and others in Washington are questioning the wisdom of allowing an American industrial icon to fall into foreign hands. Behind that is some protectionist concern — and playing to the concerns of organized labor — ahead of an election year.

Criticism of the deal is bipartisan:

  • In a letter on Tuesday to Treasury Secretary Janet Yellen (who chairs CFIUS, the interagency committee that reviews investments on national security grounds), three Republican senators recommended blocking the sale. “Domestic steel production is vital to U.S. national security,” J.D. Vance of Ohio, Josh Hawley of Missouri and Marco Rubio of Florida wrote.

  • Senator Joe Manchin, the West Virginia Democrat weighing a third-party presidential run, called the transaction a “major blow to the American steel industry which has been instrumental in making us the superpower of the world.”

  • Senator Bob Casey, a Pennsylvania Democrat who’s up for re-election, called the transaction “a bad deal for Pennsylvania and for Pennsylvania workers,” while his colleague John Fetterman pledged to “do everything I can to block it.” Senator Sherrod Brown of Ohio, who’s also running for re-election, also criticized the sale.

Behind those concerns is worry about domestic production of steel, which is increasingly seen as a vital national interest. U.S. steel makers have struggled against cheaper, state-subsidized competitors from places like China, which accounts for more than half of global production.

Former President Donald Trump sought to protect the U.S. steel industry by imposing a 25 percent tariff on most imports. And President Biden has moved to limit foreign competition and drive up demand for home-produced steel.

Steelworkers are also an important political constituency. The industry is a major employer in political battlegrounds like Pennsylvania and Ohio. And the U.S. Steelworkers union has come out against the Nippon Steel transaction. (It has supported selling U.S. Steel to a domestic rival, Cleveland-Cliffs.)

There may be limits to a national security review, however. Japan is a close U.S. ally, and Biden may not want to upset a partner he’s been courting to counter China. Rejecting the deal “would immediately create a significant issue with our Japanese allies given the importance of collaboration on other critical issues such as China and semiconductor production and supply chains,” Michael Leiter, who leads the CFIUS practice at the law firm Skadden Arps, told CNN.

The administration isn’t showing its hand: Karine Jean-Pierre, the White House press secretary, said that Biden was aware of the deal and added that it could face regulatory review, without elaborating.


Colorado’s Supreme Court disqualifies Donald Trump from the state’s primary ballot. The judges ruled that the former president’s actions before the Jan. 6 Capitol attacks were insurrection, and that this meant he violated the 14th Amendment. The ruling is sure to head to the Supreme Court; for now, Trump’s primary opponents have criticized the decision, and political prediction markets haven’t moved much.

Israel reportedly offers a new pause in its Gaza war. The proposed halt, for at least a week, would be in return for Hamas releasing more than three dozen hostages, according to Axios. The news comes as discussions at the U.N. Security Council over a resolution about aid to Gaza resume after a vote was delayed.

Jeffrey Epstein associates are set to be named. A federal judge in New York has ordered the unsealing of documents that are part of a settlement involving Ghislaine Maxwell, the disgraced financier’s enabler in sex crimes. More than 150 names are expected to be revealed, though that may include victims and people incidentally named in depositions or other case documents.

Southwest reaches a labor deal with its pilots. The tentative agreement, reached after three years of negotiating, is valued at $12 billion, according to the pilots’ union. Details about the contract weren’t disclosed, though Southwest pilots have sought to match hefty pay raises and improvements in working conditions reached by counterparts at other airlines.

The disconnect between the Fed and the markets

The S&P 500 is within about a half-percentage point of a record on Wednesday morning as investors bet that a wave of interest rate cuts is coming next year.

But Fed doublespeak is muddying the rally. In recent days, several senior officials at the central bank have tried to walk back comments made by its chair, Jay Powell, last week. He stunned Wall Street when he said that the Fed expected to make three interest-rate cuts next year, bringing to an end a period of restrictive credit.

Raphael Bostic is the latest to push back. Bostic, the president of the Atlanta Fed, said on Tuesday that there was no “urgency” to lower borrowing costs. His rationale: Inflation could yet remain stubbornly high over the next six months. Loretta Mester, John Williams and Austan Goolsbee, his counterparts in Cleveland, New York and Chicago, have made similarly cautious comments.

For good measure, Bostic predicted no more than two rate cuts next year — and none in the first six months. On Tuesday, traders on the futures market were betting on five.

The disconnect creates some drama around this week’s inflation report. Wall Street will be closely analyzing the Personal Consumption Expenditures report, the Fed’s preferred inflation gauge. A disappointing reading could add volatility to the markets.

Lisa Shalett, the chief investment officer at Morgan Stanley Wealth Management, warned investors in a research note on Monday that there has been little progress lately in bringing core inflation, which strips out food and fuel prices, closer to the Fed’s 2 percent target. “Core inflation isn’t even close to ‘mission accomplished,’” she wrote.

Supply-chain snarls in the Middle East could create inflationary pressure. Traffic through the Red Sea and Suez Canal, a vital trade route, has slowed because of attacks on ships in the Red Sea by Houthi rebels, posing another risk to the global economy. Some logistics giants are braced for weeks of disruption. On Wednesday, global oil prices ticked higher, as have shipping rates in recent days.

  • In related economic news: FedEx, a bellwether for the health of the economy, lowered its sales forecast on Tuesday, expecting weaker demand in the year ahead. The stock fell more than 9 percent in premarket trading.

Bird, the electric scooter, company has filed for bankruptcy protection, months after it was delisted from the New York Stock Exchange.Credit…William DeShazer for The New York Times

A two-wheeled unicorn runs out of road

Bird, an electric scooter company that was one of the start-ups fastest to become a unicorn, announced on Wednesday that it had filed for bankruptcy protection.

To help it continue operating, the company said, it had secured $25 million in financing from Apollo Global Management and its second-lien lenders. Michael Washinushi, Bird’s interim C.E.O., will stay on, as the company pursues a turnaround plan that could involve selling assets.

The shine on this once buzzy part of the urban mobility sector has begun to fade., formerly known as Helbiz, was delisted from the Nasdaq on Tuesday and another rival, Tier Mobility, made its third round of layoffs last month.

Bird has long positioned itself as a partner to help cities go green. It was started in 2017 and expanded quickly, fueled by big-name Silicon Valley investors including Sequoia Capital and Accel Partners. It raised over a half-billion in venture funding and went public via a SPAC in 2021.

But Bird’s losses piled up,and the company was delisted from the New York Stock Exchange in September. That came after it admitted to the S.E.C. that it had overstated its revenues for more than two years; its founder, Travis VanderZanden, left in June.

Bird scooters can be found in more than 350 cities, from Rome to San Francisco. (The firm’s Canadian and European businesses aren’t part of the bankruptcy, Bird noted, and will continue to operate as normal.) There have also been plenty of complaints about abandoned rental scooters cluttering sidewalks and parks. Paris banned e-scooter rentals this year, a first for a European capital, though it still allows privately owned e-scooters.

Betting on FTX becomes an ‘insane’ trade

The price of Bitcoin has more than doubled this year and is approaching $43,000 on Wednesday. That’s not the only hot action in crypto.

Speculators are fueling a brisk trade in creditors’ claims — essentially an i.o.u. — attached to FTX, the collapsed crypto exchange founded by the convicted fraudster Sam Bankman-Fried. “The market is insane,” said Thomas Braziel, a partner at the investment firm 117 Partners. “It’s so hot.”

The Times’s David Yaffe-Bellany and Matthew Goldstein explain what’s at stake.



  • OpenAI’s C.E.O., Sam Altman, reportedly raised $75 million from the University of Michigan for a new venture capital fund. (Fortune)

  • Spain agreed to buy a 10 percent stake in Telefonica, valued at about $2 billion, after a Saudi Arabia-backed group invested in the telecoms firm. (FT)


  • The F.T.C. will ban the pharmacy chain Rite Aid from using facial-recognition technology for five years as part of a settlement over “reckless” surveillance. (The Verge)

  • The I.R.S. plans to waive about $1 billion worth of penalties for taxpayers who missed deadlines during the pandemic. (Politico)

Artificial intelligence

  • A British court ruled that inventions by artificial intelligence systems cannot be patented. (Reuters)

  • Even advanced artificial intelligence systems struggle to properly analyze S.E.C. filings, new research found. (CNBC)

  • Google will restrict the election-related queries that its Bard chatbot and search engine can answer ahead of next year’s presidential election. (Reuters)

Best of the rest

  • “What Social Trends Taught Us About the 2023 Economy” (NYT)

  • As Disney continues to suspend advertising on X, Tesla has reportedly blocked the Disney+ streaming service from some of its cars. (Vulture)

  • Why the office cubicle is making a comeback. (NYT)

  • In his annual letter, Bill Gates predicts that artificial intelligence and nuclear power will play a crucial role in addressing health care and climate challenges. (GatesNotes)

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