Biden to block $14.9b US Steel sale to Japan’s Nippon Steel

President Joe Biden is poised to block the $14.9 billion acquisition of US Steel by Japan’s Nippon Steel, according to two anonymous sources within his administration. The Washington Post reported that a formal announcement is expected as early as Friday, barring any last-minute changes from Biden, which officials do not anticipate.

The decision, influenced by national security concerns, comes despite internal disagreements within Biden’s administration. “This was not an easy call, but the president felt strongly that America’s steel industry is a vital national asset that must be protected,” said a senior White House official familiar with the matter.

The controversy stems from a deadlock in the Committee on Foreign Investment in the United States (CFIUS), which left Biden to decide. The Committee’s inability to reach a consensus reflected the contentious nature of the deal, with key stakeholders highlighting economic and geopolitical risks.

Biden’s opposition to the sale aligns with the views of the United Steelworkers union, whose leaders have voiced strong concerns about foreign ownership. “This deal would hand over control of an essential American industry to a foreign corporation,” said Tom Conway, president of the United Steelworkers. “We’re grateful President Biden is standing with American workers on this.”

The president-elect, Donald Trump, and incoming Vice President J.D. Vance have also opposed the transaction, amplifying its prominence during the 2024 presidential campaign. “Allowing this sale would undermine our country’s economic independence and national security,” Trump said at a rally in Pennsylvania.

Nippon Steel, however, has defended the acquisition, arguing that it would revitalize Pennsylvania’s declining steel industry. “This transaction represents a chance to preserve jobs and modernize production facilities,” Nippon Steel CEO Eiji Hashimoto said in a statement. “We are deeply disappointed by this decision, which we believe is unjustified.”

The Japanese company, alongside US Steel, has vowed to challenge the government’s decision in court. “The U.S. government has failed to follow established procedures in its review of this acquisition,” said a US Steel spokesperson.

Critics of the decision warn of diplomatic fallout with Japan, a key U.S. ally. “Blocking this deal sends a troubling message to foreign investors and could damage the strong economic partnership between the United States and Japan,” said a policy analyst at a Washington-based think tank.

With Pennsylvania emerging as a pivotal swing state in the 2024 election, Biden’s decision is seen by many as a nod to both political and economic pressures. As the fallout continues, questions remain about the broader implications for U.S.-Japan relations and the future of American manufacturing.