President Joe Biden rejected Japan’s Nippon Steel’s proposed nearly US$15 billion deal to buy Pittsburgh-based US Steel, confirming his desire to block the acquisition of the most iconic steel company of the United States.
“We need major American companies representing the majority of America’s steel production capacity to continue to lead the fight on behalf of America’s national interests,” Biden said in a statement Friday. Morning.
His decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the deal’s possible national security risks last month. He sent a long-awaited report on the merger to President Biden. The latter had 15 days to make a decision.
The committee, chaired by Treasury Secretary Janet Yellen and made up of other Cabinet members, can recommend to the president to block a transaction. Federal law gives this power to the president.
A U.S. official familiar with the matter, who spoke on condition of anonymity, told The Associated Press last month that some federal agencies represented on the committee were skeptical that allowing a Japanese company to buy a steelmaker American would create risks for national security.
The decision comes just weeks before the Democratic president leaves office and could damage relations between the United States and Japan, which is the United States’ largest ally in Asia. Japan is also the largest foreign holder of U.S. debt.
Joe Biden had already spoken out against the agreement last March — and was supported by the United Steelworkers. The United Steelworkers union was concerned about whether the company would honor existing labor contracts or cut jobs, as well as the company’s financial transparency.
President-elect Donald Trump also opposed the acquisition and vowed in December on his Truth Social platform to block the deal and use tax incentives and tariffs to grow the company.
On Friday, USW President David McCall said the union was grateful for Mr. Biden’s decision to block the sale and called it “the right decision for our members and our national security.”
Mr. McCall has long questioned Nippon Steel’s status as an honest conduit for U.S. domestic business interests and reiterated that on Friday, saying in a statement that “Nippon has proven itself to be a trade cheat.” in series.
Mr. McCall insisted that US Steel had the financial means to make the company strong and resilient.
For its part, Nippon Steel had said it was best positioned to help American steel compete in a Chinese-dominated industry and to invest billions in facilities represented by the United Steelworkers, including blast furnaces. aging of the company.
Nippon Steel announced plans in December 2023 to buy the steel producer for US$14.9 billion in cash and debt, and committed to retaining the US Steel name and Pittsburgh headquarters. Even so, his proposal has raised concerns about the deal’s implications for union workers, supply chains and U.S. national security.
The announcement came amid renewed political support for rebuilding the U.S. manufacturing sector and after a long period of protectionist U.S. tariffs that analysts say helped reinvigorate domestic steel.
Nippon Steel waged a public relations campaign to win over supporters, even offering $5,000 closing bonuses to US Steel employees, an expense of nearly $100 million.
A growing number of conservatives and business groups, such as the U.S. Chamber of Commerce, had publicly supported the deal, while Nippon Steel began to rally some members of the metalworkers’ union and mayors from nearby areas of its blast furnaces in Pennsylvania and Indiana.
