US President Joe Biden has blocked the $14.9 billion takeover of US Steel by Japan's Nippon Steel, citing national security concerns and fulfilling a political promise despite potential diplomatic repercussions with Japan and concerns over foreign investment in the US. Biden emphasized the importance of maintaining strong US ownership in critical industries like steel to secure the nation's supply chains and infrastructure. This decision follows significant opposition from the United Steelworkers union, which feared the deal would harm American workers.
Both Nippon Steel and US Steel criticized Biden's intervention, accusing the government of politicizing the review process for electoral gain. The companies, which had previously warned they might sue if the deal was blocked, said Biden’s move sent a "chilling message" to foreign companies considering significant investments in the US. "We believe that President Biden has sacrificed the future of American steelworkers for his own political agenda," the companies said in a statement.
The deal had been announced by Nippon Steel in December 2023, following months of uncertainty about US Steel's future. The Pennsylvania-based steelmaker, once a symbol of American industrial strength, has struggled in recent years. Despite efforts to find a buyer, US Steel faced concerns about its ability to stay competitive without external investment. Nippon Steel, the world's fourth-largest steelmaker, had promised not to cut jobs and offered additional concessions, including funding a workforce training center. However, these efforts failed to sway Biden, who had opposed the deal from the outset, especially with Pennsylvania being a crucial swing state in the upcoming election.
Biden’s decision also came amid criticism from political figures like President-elect Donald Trump and incoming Vice President JD Vance, who had rallied union workers against the deal during their campaigns. The US government panel tasked with reviewing the national security risks of the deal had failed to reach a consensus, leaving Biden to make the final call.
In his announcement, Biden explained that foreign ownership posed a risk to the US steel industry’s security and resilience. A strong domestically owned and operated steel industry represents an essential national security priority, he said, highlighting the role of steel in powering the nation’s infrastructure, auto industry, and defense sector. The United Steelworkers union hailed the decision, calling it "the right move for our members and national security.
Professor Stephen Nagy, from Tokyo’s International Christian University, noted that Biden's action was politically motivated, reflecting the administration’s commitment to middle-class foreign policies and a continuation of the Make America Great Again agenda.
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