President Joe Biden has blocked a $14.9 billion acquisition of US Steel by Japan’s Nippon Steel, citing national security concerns. This move follows through on Biden’s earlier pledge to keep the American steelmaker domestically owned as he prepares to leave office. Both companies have expressed their intention to take legal action to protect their rights, with Nippon Steel reportedly planning to sue the US government.
In a statement, Biden reaffirmed, “US Steel will remain a proud American company—one that’s American-owned, American-operated, by American union steelworkers—the best in the world.” The decision comes as US Steel, which had argued that the deal would enhance national security, faces the challenge of securing nearly $3 billion in promised investment from the Japanese company. Without this funding, US Steel warned it would be forced to idle key mills, leading to a 7% drop in the company’s shares on the New York Stock Exchange.
Nippon Steel, in response to the decision, is reportedly preparing to challenge the legality of the procedures by which Biden blocked the acquisition. However, they did not immediately comment on the matter. The decision followed a lengthy national security review led by the Committee on Foreign Investment in the United States (CFIUS), which assesses potential risks of foreign investments. Biden emphasized that the sale would place a critical American steel producer under foreign control, which could harm national security and supply chains vital to infrastructure and defense industries.
US Steel, the second-largest steel producer in the US, had argued that the acquisition would boost national security by combating China’s competitive threat in the steel industry. However, political opposition to the deal was significant, including from both Biden and his successor, Donald Trump, who both sought to appeal to union voters in Pennsylvania, where US Steel is based. The United Steelworkers union also strongly opposed the sale, claiming that US Steel’s focus on short-term financial gain would undermine workers’ interests. Union president David McCall praised Biden’s decision, declaring it was the right call.
Biden’s move concludes a protracted debate over US Steel’s future. Earlier reviews by the CFIUS raised concerns about the deal’s potential impact on steel supply for critical industries. Nippon Steel countered that its investments would strengthen US Steel’s output, leading to a 90-day review extension. However, hopes for approval faded when CFIUS laid out unresolved security risks in a detailed report last month. Biden’s decision signals his unwavering commitment to ensuring that American companies remain central to sectors critical for national security. This announcement echoes similar sentiments expressed by Donald Trump, who campaigned on protecting American jobs and industries from foreign competition.
