US Steel and Nippon Steel threatened legal action on Friday after President Joe Biden blocked the Japanese company’s controversial $14.9 billion deal to buy its American rival. Biden cited a strategic need to protect domestic industry – but the move was sharply criticized by both companies.
The decision came after a government panel failed to reach consensus last month on whether the acquisition threatened US national security, shifting the decision to the veteran Democrat in the final days of his presidency.
Yet the move marked rare bipartisan agreement, with Republican President-elect Donald Trump and incoming Vice President J.D. Vance also campaigning against the sale.
“This acquisition would bring one of America’s largest steel producers under foreign control and pose a risk to our national security and our critical supply chains,” Biden said in a statement.
“That’s why I’m taking action to stop this deal.”
The United Steelworkers union immediately welcomed the announcement. “We are grateful for President Biden’s willingness to take bold steps to maintain a strong domestic steel industry and his lifelong commitment to American workers,” said USW International President David McCall.
‘Political decision’
Nippon Steel and US Steel expressed disappointment at the outcome, saying it “represents a clear violation of due process and the law.”
“The President’s statement and order present no credible evidence of a national security issue, making it clear that this was a political decision,” the companies said in a joint statement.
They said they would “take all appropriate action” to protect their legal rights.
The companies said they negotiated transparently with the Committee on Foreign Investment in the United States (CFIUS), which was reviewing the deal.
But he alleged that “the process has been deeply tainted by politics,” claiming that the outcome was “predetermined.”
“Unfortunately, this sends a chilling message to any company based in a U.S. ally country considering a significant investment in the United States,” the statement said.
“This is not about Japan,” White House press secretary Karine Jean-Pierre told reporters. He said Biden has strengthened relationships with allies during his tenure.
“We are in touch with Japan and are conveying our views directly to them,” he said.
US Steel shares fell 6.5 percent on Friday.
Japan’s Industry Minister Yoji Muto said, “It is incomprehensible and regrettable that the Biden administration has taken such a decision citing national security concerns.”
“The Japanese government has no choice but to take this seriously,” he said in a statement sent to AFP on Saturday.
‘Level the playing field’
Biden’s decision, less than three weeks before leaving office, came after a long wrangling over competing domestic political, economic and trade demands.
The outgoing president, who has made rebuilding the US manufacturing base a major goal of his administration, had criticized the deal for months while balking at a move that could damage relations with Tokyo.
Nippon Steel touted the acquisition as a lifeline for an American company that is past its heyday, but opponents warned that the Japanese owners would cut jobs.
Nippon Steel attempted to calm nerves by promising to hold off on any layoffs or closures of unionized facilities for the duration of the current union contract, which expires in 2026.
But McCall warned Friday that allowing Nippon Steel to buy U.S. steel would “give it the opportunity to further destabilize our trading system from within.”
Political intrigue over the deal intensified during the November presidential election, in which Pennsylvania – home of US Steel – was a key swing state, giving USW union leaders influence.
The decision was left to Biden after CFIUS reached an impasse over the transaction.
Biden blamed unfair foreign trade practices for the decline of US steel, reiterating Trump’s own trade policies. His mix of protectionism and subsidies has helped revive the industry, he said.
“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 Friday.
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical to resilient supply chains,” he said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
