Photo: Jeff Swensen / Getty Images News / Getty Images
President Joe Biden has blocked the $15 billion acquisition of U.S. Steel by Japan's Nippon Steel, citing national security concerns. The decision, announced Friday (January 3), follows a yearlong review by the Committee on Foreign Investment in the United States (CFIUS), which failed to reach a consensus on the deal. The president's move underscores the importance of maintaining a strong, domestically owned steel industry, which he described as "the backbone of our nation."
U.S. Steel, founded in 1901 and based in Pittsburgh, has seen its workforce shrink from a peak of 340,000 during World War II to around 11,000 today. The company has struggled against cheaper foreign competition, particularly from Asia. U.S. Steel's stock dropped 7% following the announcement.
The United Steelworkers union, representing many of the company's employees, praised Biden's decision, emphasizing the need to protect American jobs and national security. However, the decision has sparked concerns about its potential impact on U.S.-Japan relations and future foreign investments in American companies.
Nippon Steel, Japan's largest steelmaker, had proposed to invest $2.7 billion in U.S. Steel's operations. The company argued that the acquisition would enhance U.S. national and economic security by combating competition from China. Despite Biden's decision, Nippon Steel and U.S. Steel plan to pursue legal action to seek approval for the deal.
President-elect Donald Trump also opposed the acquisition, promising to block it and revitalize U.S. Steel through tax incentives and tariffs. The decision comes as Biden prepares to leave office in two weeks, marking a significant use of executive authority in his administration's final days.