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U.S. President Joe Biden on Friday announced he has blocked the controversial $14.9 billion sale of U.S. Steel to Japan’s Nippon Steel, citing a strategic need to protect domestic industry.
“This acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said in a statement.
“That is why I am taking action to block this deal.”
Mr. Biden’s decision, less than three weeks before he leaves office, follows extended political wrangling over competing domestic political, economic and trade demands.
The Democrat, who made rebuilding of the U.S. manufacturing base a major goal of his administration, had criticised the deal for months, while holding off from a decision that could risk damaging relations with Tokyo.
There was rare bipartisan agreement on the issue, with Republican President-elect Donald Trump and the incoming Vice-President, J.D. Vance, also campaigning against the sale.
Nippon Steel touted the takeover as a lifeline for a U.S. company that is long past its heyday.
Opponents warned that the Japanese owners would slash jobs. Nippon Steel attempted to calm nerves by pledging a pause on any layoffs or closures of unionized facilities through the current union contract expiring in September 2026.
Political intrigue over the deal intensified during the November presidential election, in which Pennsylvania — the home of U.S. Steel — was a critical swing State, giving United Steelworkers union leaders added influence.
The decision was left with Biden after a U.S. government panel failed to reach a consensus in late December on whether U.S. Steel’s acquisition by Nippon Steel threatened Washington’s national security.
The transaction was then referred to Mr. Biden, who was legally required to act within a 15-day deadline, after the deadlock by the Committee on Foreign Investment in the United States (CFIUS).
The Japanese company and U.S. Steel have vowed to pursue legal action against the government, claiming it failed to follow proper procedures during its consideration of the acquisition.
Mr. Biden — echoing Mr. Trump’s own trade policies — blamed unfair foreign trade practices for the decline of U.S. steel. He said his mixture of protectionism and subsidies had brought the industry back to health.
“I have taken decisive action to level the playing field for American steelworkers and steel producers by tripling tariffs on steel imports from China,” Mr. Biden said.
“With record investments in manufacturing, more than 100 new steel and iron mills have opened since I took office, and… the domestic steel industry is the strongest it has been in years.”
“Steel production — and the steel workers who produce it — are the backbone of our nation,” Mr. Biden said.
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
Published – January 03, 2025 10:10 pm IST
