President Biden has blocked the $14.9 billion acquisition of U.S. Steel by Nippon Steel of Japan, citing significant national security concerns.
In a decisive move, President Biden has halted the acquisition of U.S. Steel by Nippon Steel, emphasizing the importance of domestic ownership in securing the nation’s steelmaking capabilities.
Biden highlighted that maintaining control over steel production is essential for both U.S. security and the fortification of domestic supply chains. “Without domestic steel production and workers, our nation is less strong and less secure,” he stated. “We need major U.S. companies to represent a significant share of steel production to advocate for America’s national interests.”
This significant decision marks a rare use of presidential authority to impede a major commercial transaction with a key ally, signaling a victory for the United Steelworkers union, which strongly opposed the deal. The situation is particularly noteworthy as U.S. Steel is headquartered in Pennsylvania, a critical swing state.
Although U.S. Steel boasts a rich history, it has diminished in stature, currently ranking as the third-largest steel producer in the U.S., accounting for less than 20% of the nation’s steel output. An inter-agency committee tasked with reviewing foreign investments could not reach a consensus on the national security implications of the sale, thereby entrusting the final decision to President Biden.
Nippon Steel made fervent attempts to rescue the transaction, pledging to bolster domestic production and invest approximately $3 billion in upgrading U.S. Steel’s aging facilities in Pennsylvania and Indiana. However, if the deal falters, U.S. Steel warned of potentially diverting operations to non-union sites, threatening numerous union jobs.
