| Key Points: – President Biden blocked the $14 billion sale of US Steel to Nippon Steel, citing national security concerns. – US Steel and Nippon Steel criticized the decision as political and suggested they may pursue legal action. – The move highlights bipartisan resistance to foreign acquisitions in critical American industries. |
In a decision underscoring Washington’s protectionist stance, President Joe Biden on Friday blocked the $14 billion acquisition of Pittsburgh-based US Steel (X) by Japan’s Nippon Steel, citing national security concerns. The move has created significant uncertainty for the iconic 124-year-old steelmaker, whose shares fell more than 7% in morning trading following the announcement.
President Biden stated that the acquisition would “place one of America’s largest steel producers under foreign control and create risk for our national security and critical supply chains.” This rejection aligns with longstanding concerns over foreign influence on critical U.S. industries, even as the Japanese buyer had committed to retaining the US Steel name, headquarters in Pittsburgh, and making significant investments in its plants.
The decision came after months of review by the Committee on Foreign Investment in the United States (CFIUS), which could not reach a consensus. Biden’s executive order now requires the companies to abandon the deal within 30 days unless extended by CFIUS.
The deal faced fierce opposition from the United Steelworkers union, which argued that the acquisition would harm domestic workers and the nation’s steel production capabilities. Biden echoed this sentiment, emphasizing the need for domestic steelmakers to safeguard national interests.
“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.
In a joint statement, US Steel and Nippon Steel criticized the decision as a “political” move unsupported by credible national security concerns. They hinted at pursuing legal action, stating, “We are left with no choice but to take all appropriate action to protect our legal rights.”
The companies also highlighted their commitments to new investments and ensuring key directors and executives would remain U.S. citizens. They argued that their pledges would strengthen, not undermine, national security.
This decision reflects a growing trend of economic nationalism in U.S. policy. Both Biden and President-elect Donald Trump opposed the deal, signaling bipartisan resistance to foreign acquisitions of critical American industries.
Analysts suggest the decision could deter foreign companies from investing in the U.S. “It’s been a highly politicized process,” said Josh Spoores, CRU North American steel analyst, who pointed out that the decision sends a chilling message to allied countries.
It remains unclear if US Steel will seek a new buyer or pivot its strategy. The rejection is a significant setback after the company spent much of 2024 lobbying for approval. Meanwhile, the steelmaker must navigate the challenges of remaining competitive in a volatile industry.
The Biden administration’s stance may leave long-lasting implications on U.S.-foreign trade relations, especially as protectionist policies continue to shape economic strategy.