President Joe Biden has blocked a proposed nearly $15 billion deal for Japan’s Nippon Steel to buy Pittsburgh-based U.S. Steel, leading his presidential campaign to block the takeover of Steeltown USA’s most storied steel company. Confirmed previous vows inside.
The proposed deal sparked an election-year political upheaval across America’s industrial heartland and threatened a lawsuit from Nippon Steel if it was blocked.
“To continue leading the fight on behalf of America’s national interests, we need America’s major companies, which account for a major share of America’s steel production capacity,” Biden said in a statement Friday morning.
Nippon Steel and U.S. Steel said in a joint statement that Biden’s blocking of the deal “reflects a clear violation of due process and the law” in a process that was “manipulated” to further Biden’s political agenda. said in a joint statement, condemning the decision.
Biden also argued that he has not cited any credible evidence that the deal poses national security concerns, adding that he has “no choice but to take all appropriate actions to protect our legal rights.” suggested filing a lawsuit. Biden’s decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach a consensus on potential national security risks from the deal last month and issued a long-awaited report on the merger to Biden. This was done in response to the request. There was a grace period of 15 days for a final decision.
The commission, chaired by Treasury Secretary Janet Yellen and made up of other Cabinet members, can recommend that the president block the deal, and federal law gives him that authority.
A U.S. official familiar with the matter told The Associated Press last month on condition of anonymity that some federal agencies on the committee were reluctant to allow a Japanese company to acquire a U.S.-owned steelmaker. He said he was skeptical that it would pose a national security risk.
The decision, made weeks before the Democratic president leaves office, could have a negative impact on U.S. relations with Japan, America’s largest ally in Asia and the largest foreign holder of U.S. debt. be.
Both steel companies said in a statement that it was “shocking and deeply troubling” for the United States to reject deals that advance American interests and “treat an ally like Japan in this way.” . “Unfortunately, this sends a chilling message to companies based in U.S. allies who are considering making significant investments in the United States,” the companies said.
Mr. Biden had previously announced his opposition to the deal in March last year during the presidential campaign, and he has expressed his opposition to the deal, including whether the company would comply with existing labor agreements or cut jobs, as well as the company’s financial transparency. It had the support of the United Steelworkers union, which is concerned about gender equality.
“It’s important to keep America’s steel companies strong, backed by American steelworkers,” Biden said in a statement in March, when he was seeking re-election, before withdrawing from the campaign.
“U.S. Steel has been an iconic American steel company for more than a century, and it’s critical that we remain a domestically owned and operated American steel company.” President-elect Donald Trump also opposed the deal. In December, he vowed on his Truth Social platform to block acquisitions and use tax incentives and tariffs to grow the company.
On Friday, Steelworkers Union President David McCall said the union was grateful for Biden’s action to block the sale, calling it “the right thing to do for our members and for our national security.” Mr. McCall has long questioned Nippon Steel’s standing as an honest broker of U.S. national trade interests, and on Friday said in a statement that “Nippon Steel has proven to be a serial trade cheater.” He reiterated that, “If we had allowed the acquisition of US Steel, we would have made an offer to Nippon Steel.” “This is an opportunity to further destabilize our nation’s trading system internally and in the process, and undermine our ability to meet our own national security and critical infrastructure needs,” McCall said.
McCall argued that U.S. Steel has the financial resources to make the company strong and resilient.
Nippon Steel is in the best position to help American steel compete in an industry dominated by China and invest billions of dollars in facilities represented by United Steelworkers, including aging blast furnaces. He said there is.
He promised to protect U.S. Steel on trade issues and not to import steel slabs that would compete with blast furnaces.
Nippon Steel announced plans in December 2023 to acquire the steelmaker for $14.9 billion in cash and debt, pledging to keep the U.S. Steel name and Pittsburgh headquarters.
Nevertheless, the proposal raised concerns about what the deal would mean for unionized workers, supply chains and U.S. national security.
The announcement comes amid a new wave of political support for rebuilding U.S. manufacturing, following a prolonged period of U.S. protectionist tariffs that analysts say have helped revitalize domestic steel. It was done.
Nippon Steel ran a public relations campaign to gain supporters and even offered US Steel employees $5,000 closing bonuses, a cost of nearly $100 million.
Conservatives and business groups such as the U.S. Chamber of Commerce have publicly backed the deal, as Nippon Steel begins to win support from some steel union members and mayors in areas near blast furnaces in Pennsylvania and Indiana. More and more voices were saying.
