Joe Biden Blocks US Steel Acquisition by Japanese Firm
US President Joe Biden has blocked the takeover of US Steel by a bigger Japanese firm, delivering on a political promise despite fears the move could hurt Washington’s relations with Tokyo and scare off other foreign investors.
Biden cited threats to national security in rejecting the Nippon Steel purchase, saying US ownership was important to the strength of its steel industry and its supply chains.
His intervention follows pressure from the United Steelworkers union, which had opposed a transaction that was a sensitive political issue in the 2024 US presidential campaign.
Nippon Steel and US Steel said Biden’s decision showed the review of the deal had been “corrupted” for political gain
The two companies, which had previously threatened to sue the government if the deal did not happen, on Friday said they would take “appropriate action to protect their legal rights”.
Biden’s decision comes a year after Nippon steel announced the $14.9Bn deal to buy its smaller Pennsylvania-based rival.
It raises significant questions about the path forward for the company, a 124-year-old name that was once a symbol of American industrial might but is now much diminished.
It spent months looking for a buyer before announcing the tie-up with Nippon Steel, the world’s fourth-largest steelmaker, in December 2023.
US Steel has warned that it might have to close factories without the investment that would come with a new owner, concerns that had been echoed by some workers and local politicians.
The two companies had pledged not to cut jobs and made other concessions to win support for the deal. Just this week, they offered to fund a workforce training centre – and reportedly give the government the right to veto potential production cuts.
But the arguments failed to convince Biden, who had come out in opposition to the deal early last year, as election season heated up and with the key swing state of Pennsylvania poised to play a key role.
The transaction was also criticised by President-elect Donald Trump and the incoming vice-president, JD Vance, whose appeals to union workers formed a big part of their campaign message.
The US government panel charged with reviewing the deal for national security risks failed to reach a consensus by late December, leaving the decision to Biden, who was required to act within a 15-day deadline.
In his announcement on Friday, he said foreign ownership presented a risk.
