Biden blocks purchase of U.S. Steel by Japan's Nippon Steel

President Joe Biden announced Friday his decision to block the acquisition of major U.S. Steel by Japan's Nippon Steel, a deal that had been valued at $15 billion. In a statement he said:

I am taking action to block this deal. It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company. U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.  

The decision was based on National Security concerns and effectively prevents one of the nation’s largest steel companies from falling into foreign hands.

As I have said many times, steel production—and the steel workers who produce it—are the backbone of our nation. A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.

Rejection across the board

The decision followed the Committee on Foreign Investment in the United States (CFIUS) inability to reach a consensus on the acquisition. CFIUS, which evaluates the national security implications of foreign investments, ultimately passed the final decision to President Biden in December.

Despite Nippon Steel’s efforts to secure the deal and address concerns—such as guaranteeing that U.S. Steel would remain managed from Pittsburgh with a board largely composed of Americans—the purchase was ultimately rejected.

However, Biden isn’t the only one opposed to the sale. Political leaders from both parties, including President-elect Donald Trump, had previously emphasized the importance of keeping U.S. Steel under American control.

Shares fall

As a result, U.S. Steel’s shares dropped 8% following the announcement. A spokeswoman for the company expressed disagreement with the decision, arguing that the acquisition would have strengthened U.S. Steel’s position against Chinese competition. "We believe this deal was the best way to ensure a prosperous future for our employees, customers and the U.S. steel industry."

Founded in 1901, U.S. Steel is a symbol of American manufacturing.