 "US President Joe Biden. Reuters")
President Joe Biden on Friday (January 3) blocked Japan’s Nippon Steel from acquiring US Steel in a $14.3 billion deal, citing national security concerns and marking a significant intervention in a politically charged transaction.
The decision, which aligns with the United Steelworkers union’s staunch opposition, actually points to broader anxieties about foreign ownership of critical American industries.
“As I have said many times, steel production – and the steel workers who produce it – are the backbone of our nation,” Biden said in a statement.
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
The move caps months of contentious debate over the proposed acquisition, announced in December 2023. The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign mergers for national security risks, failed to reach a consensus, leaving the decision to the president, CNN reported.
Biden’s rejection comes despite claims from US Steel and Nippon that the deal would revitalise the struggling steelmaker with $2.7 billion in investment for its domestic operations.
Union support and political calculations
The United Steelworkers union, representing 11,000 of US Steel’s 14,000 employees, applauded the decision, saying it protects union jobs and national security. “We have no doubt that it’s the right move for our members and our nation,” the union said.
However, critics argue the decision was politically motivated.
Founded in 1901, US Steel was once the world’s most valuable company, symbolising America’s industrial dominance.
Today, it is no longer the largest US steelmaker and struggles to compete in a changing market, according to CNN.
However, it remains a point of pride in key political battlegrounds like Pennsylvania, where its legacy looms large despite decades of decline.
While the company now employs far fewer workers, it still supports nearly 18,000 retirees through pension funds and holds sentimental value for many families.
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US Steel and Nippon issued a joint statement condemning the decision and vowing to challenge it in court. “The president’s statement and order do not present any credible evidence of a national security issue, making clear that this was a political decision,” the companies said. They warned that blocking the deal would deny essential investment, risking the closure of mills and thousands of union jobs.
“Blocking this transaction means denying billions of committed investment to extend the life of US Steel’s ageing facilities,” the statement added.