Biden blocks US Steel sale to Japan’s Nippon Steel

WASHINGTON: President Joe Biden today blocked the controversial US$14.9 billion sale of US Steel to Japan’s Nippon Steel, citing a strategic need to protect domestic industry.

The move came after a government panel failed to reach consensus last month on whether the acquisition threatened US national security, shifting the decision to the Democrat in the waning days of his presidency.

“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.”

The United Steelworkers union quickly welcomed the announcement.

“We’re grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers,” USW International president David McCall said.

US Steel’s shares slumped more than 5% in early trading.

Biden’s decision, less than three weeks before he leaves office, follows extended wrangling over competing domestic political, economic and trade demands.

The veteran Democrat, who made the rebuilding of the US manufacturing base a major goal of his administration, had criticised the deal for months, while holding off on a move that could risk damaging relations with Tokyo.

There was rare bipartisan agreement on the issue, with Republican president-elect Donald Trump and incoming vice-president JD Vance also campaigning against the sale.

Nippon Steel had touted the takeover as a lifeline for a US company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs.

Union pushback

Nippon Steel attempted to calm nerves by pledging a pause on any layoffs or closures of unionised facilities for the duration of the current union contract, which expires in September 2026.

But McCall warned today that allowing Nippon Steel to purchase US Steel would have “offered it the opportunity to further destabilise our trade system from within”.

Political intrigue over the deal intensified during the November presidential election, in which Pennsylvania – the home of US Steel – was a critical swing state, giving USW union leaders added influence.

The decision was left with Biden after the Committee on Foreign Investment in the United States (CFIUS) reached a deadlock on the transaction.

The president then had to act within a 15-day window.

The Japanese company and US Steel have vowed to pursue legal action against the government, claiming it failed to follow proper procedures during its consideration of the acquisition.

Biden – echoing Trump’s own trade policies – blamed unfair foreign trade practices for the decline of US steel.

He said his mixture of protectionism and subsidies had helped revive the industry.

“I have taken decisive action to level the playing field for American steelworkers and steel producers by tripling tariffs on steel imports from China,” Biden said today.

He touted manufacturing investments that led to the opening of dozens of steel and iron mills during his four years in office.

“Steel production – and the steel workers who produce it – are the backbone of our nation,” Biden said.

“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” he added.