Steel Caucus Wants CFIUS Probe of China Investment in U.S. Firm

Members of the bipartisan Congressional Steel Caucus--headed by Chairman Peter Visclosky (D-Ind.) and Vice Chairman Timothy Murphy (R-Pa.)--July 2 asked the Committee on Foreign Investment in the United States (CFIUS) to investigate the recently announced Chinese investment in the U.S. steel sector, but the steel firm in question July 6 dismissed the national security concerns raised by the lawmakers.

The letter to U.S. Treasury Secretary Timothy Geithner, signed by 50 representatives, involves the planned joint venture between Anshan Iron and Steel Group and the Steel Development Company. While an industry group supports the letter, a legal expert and the U.S. firm see no need for a CFIUS review.

Joseph Dennin, an attorney with McKenna Long & Aldridge and who represented the Commerce Department on CFIUS, said the Congressional Steel Caucus letter apparently is trying to get CFIUS to do what it is not designed to do--protect jobs and U.S. firms from competition from other U.S. firms that are wholly or partially foreign owned.

Dennin described the national security case as "farfetched," noting that mitigation agreements could be made to shield the Chinese from information regarding new steel production technologies and information on U.S. national security infrastructure projects.

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