American President Joe Biden on Friday declined the proposed acquisition of US Steel by Japan’s Nippon Steel, valued at approximately $15 billion, upholding his earlier pledge to prevent the takeover.
“We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden stated.
The decision cams as CFIUS was unable to reach an agreement regarding potential national security implications last month. The committee submitted their assessment to Biden, who had a fortnight to make his final determination.
The committee, led by Treasury Secretary Janet Yellen and including other Cabinet officials, possesses the authority to advise the president on blocking transactions, with federal legislation granting the president such authority.
This statement came after President-elect Donald Trump has also expressed opposition to the acquisition, stating on Truth Social his intention to block it and implement tax incentives and tariffs to strengthen the company.
Steelworkers’ union leader David McCall endorsed Trump’s stance last month, advocating for the deal’s rejection.
An anonymous US official disclosed to The Associated Press that certain federal agencies within the committee questioned whether Japanese ownership of an American steelmaker would pose genuine national security concerns.
This ruling, announced as the Democratic president approaches the end of his term, might affect diplomatic relations with Japan, America’s principal Asian ally and the largest foreign owner of US government debt.
Biden initially opposed the deal in March, supported by the United Steelworkers, who expressed concerns about labour agreement compliance, potential job losses, and corporate financial transparency.
“It is important that we maintain strong American steel companies powered by American steel workers,” Biden declared in March, during his presidential campaign before withdrawing from the race. “US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”
Nippon Steel’s December announcement of their $14.1 billion cash offer included commitments to retain the US Steel name and Pittsburgh headquarters. However, concerns persisted regarding implications for unionised workers, supply chains and national security.
The proposal garnered support from various quarters, including legislators and organisations such as the US Chamber. Former Secretary of State Mike Pompeo criticised potential rejection as “shortsighted” in the Wall Street Journal.
“The deal would strengthen US Steel’s current operations and production capacity, benefit its workers and their communities, and enhance the competitiveness of the American steel industry,” Pompeo wrote in December.
