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Biden Blocks US Steel-Nippon Steel Deal

[ January 3, 2025   //   Gary G Burrows ]

Biden Blocks US Steel-Nippon Steel Deal

President Joe Biden has stepped in to block the US$14.9 billion takeover of U.S. Steel by Nippon Steel of Japan, claiming the proposed sale posed a potential national security threat.
Merely days before leaving the White House, Biden issued an executive order prohibiting the sale, or any potential transaction between Nippon Steel and U.S. Steel. He claimed his authority is provided through the International Emergency Economic Powers Act.
“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 Jan. 3 statement.
The executive order sets a 30-day deadline for the two sides to abandon the proposed deal, unless the Committee on Foreign Investment in the U.S., or CFIUS, has additional qualifications or conditions. CFIUS, which includes the departments of Treasury and Justice, determined the deal would place one of the largest U.S. steel producers under foreign control.
“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,” Biden stated.
His decision could face court challenges; Nippon indicated that it was prepared to take legal action if the deal was blocked. The Japanese steelmaker sent a letter to CFIUS in December, accusing the White House of “impermissible influence” in the process.
U.S. Steel, which was founded in Pittsburgh more than 120 years ago, previously said that it would relocate out of Pittsburgh if the Nippon Steel deal did not go through.
The U.S. Chamber of Commerce voiced opposition to Biden’s action, in a Jan. 3 statement. “The Biden administration’s politicization of Nippon Steel’s acquisition of U.S. Steel threatens to impose a high economic cost on the American people in the years ahead,” said John Murphy, senior vice president and head of international at the Chamber. “The first detrimental impacts will likely be felt by steelworkers — in Pennsylvania, Indiana, and other states — whose livelihoods are threatened by this decision. The decision also could have a chilling effect on international investment in America.”
Biden, however, said a 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.”
U.S. steel companies have faced unfair trade practices as foreign competitors have dumped steel on global markets at artificially low prices, leading to job losses and factory closures, the president said.
During his tenure, Biden has tripled tariffs on steel imports from China, while the U.S. industry has made “record investments in manufacturing,” and more than 100 new steel and iron mills have opened, making the domestic steel industry “the strongest it has been in years.”
Meanwhile, Donald Trump, who will be sworn in as the 47th U.S. president on Jan. 20, has promised to implement hefty tariffs against China and North American countries in attempt to support domestic manufacturing.