US Steel warns of closures and layoffs if Joe Biden blocks the purchase agreement with Nippon Steel

Joe Biden's government is preparing to announce the blocking of the proposed US$14.9 billion takeover of US Steel by Nippon Steel. The information was confirmed by at least three sources familiar with the matter.

"The stunning move to kill a deal featuring a corporation from Japan, a close U.S. ally, comes as Vice President Kamala Harris battles former president Donald Trump for support from union members across the industrial Midwest," explained the Washington Post.

Similarly, it was learned that the transaction was investigated by the Interagency Committee on Foreign Investment for possible national security implications. The president should wait for the report to block the transaction.

"But after an extensive review, the Treasury-led committee appears to have concluded that the national security concerns raised by the acquisition could not be mitigated, according to two industry sources who asked not to be named discussing sensitive deliberations," detailed the Washington Post.

After the information became known, US Steel's share price lost a quarter of its value in about 30 minutes of trading. The company's shares closed the day down 17.5%.

Meanwhile, US Steel CEO David Burritt had warned that the end of the agreement would put the jobs of hundreds of workers at risk. Last week, the Japanese company increased its planned investment in the new US Steel by $1.3 billion, on top of the $1.4 billion it had previously reported.

The additional money, the company said, would be used to modernize two of US Steel's facilities, Mon Valley Works in Pennsylvania and Gary Works in Indiana. US Steel maintained that it would not assume the same costs.

"We continue to stand by the fact that there are no national security issues associated with this transaction, as Japan is one of our most staunch allies. We fully expect to pursue all possible options under the law to ensure this transaction, which is the best future for Pennsylvania, American steelmaking, and all of our stakeholders, closes," US Steel stated.