President Joe Biden on Friday blitzed Nippon Steel Corp.’s proposed $14.9 billion bid to buy Pittsburgh-based US Steel Corp., calling the potential acquisition a threat to national security that could also hamper America’s critical supply chains.
“As I have made clear since day one: I will never hesitate to act to protect the security of this nation and its infrastructure as well as the resilience of its supply chains,” Biden said in a presidential order. “So, that is why I am taking action to block this deal.”
Nippon Steel, Japan’s largest steelmaker and the third-largest producer of crude steel in the world, and US Steel both have said they will pursue legal action against the United States government, and allege a lack of due process during its review of the proposed purchase, which was first announced in December 2023.
And in recent days, some of Biden’s senior advisors warned him against quashing the deal for fear it would harm U.S.-Japan relations, according to media outlets.
But that didn’t deter Biden in making his long-awaited final decision, pointing out that because steel powers America’s infrastructure, auto industry, and defense industrial base, both domestic steel production and domestic steel workers are needed to ensure the nation remains strong and secure.
“As I have said many times, steel production — and the steel workers who produce it — are the backbone of our nation,” the president said in his announcement. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.”
Biden’s decision also follows the release of a Dec. 23, 2024 report by the Committee on Foreign Investment in the United States (CFIUS), a panel of national security and trade experts across the executive branch that reviews foreign investments in the U.S. for possible national security concerns. CFIUS said in the report that it couldn’t reach a consensus on the risks of the Nippon Steel acquisition and left the final decision to Biden.
However, the committee did say that if Nippon Steel bought US Steel, the Japanese company could reduce US Steel’s stateside output, potentially leading to supply shortages and delays that would impact “industries critical to national security,” including the transportation and energy sectors.
“We need major U.S. companies representing the major share of U.S. steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden agreed.
The president also pointed out that America’s steel companies for too long have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, leading to job losses and factory closures across the country.
“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. “With record investments in manufacturing, more than 100 new steel and iron mills have opened since I took office, and U.S. companies are producing the cleanest steel in the world. Today, the domestic steel industry is the strongest it has been in years.”
United Steelworkers (USW) International, the union representing 850,000 workers, applauded Biden’s decision to nix the proposed sale of US Steel, calling it the right move for its members and for national security.
“Throughout the past year, as the proposed transaction was under review, our union’s first and only concern has been the long-term viability of our facilities as we look to ensure a strong domestic steel industry well into the future,” USW International President David McCall said Friday.
McCall pointed out that Nippon has proven itself to be “a serial trade cheater” that for decades has worked to undermine the U.S. industry by dumping its products into the American market.
“Allowing it to purchase US Steel would have offered it the opportunity to further destabilize our trade system from within and in the process, compromise our ability to meet our own national security and critical infrastructure needs,” he said.
McCall also added that US Steel’s recent financial performance shows that it can easily remain a strong and resilient company. “We now call on US Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable,” he said.
Currently, those steps for US Steel are unclear.
US Steel could remain a stand-alone company, though David Burritt, who has served as president and CEO of US Steel since 2017, has contended all along that the company doesn’t have the necessary financial resources to upgrade some of its old blast furnaces in Pennsylvania’s Mon Valley and in Gary, Ind.
And this past fall, Burritt defended the company’s sale to Nippon Steel, claiming it had benefits for national security, economic security, and job growth in the U.S., telling the Wall Street Journal in a September 2024 interview that if the acquisition fell through, then US Steel would have to close plants and might move its headquarters out of Pittsburgh, where it’s been based since 1901. He also said the company needed the planned infusion of cash promised by Nippon Steel.
Nevertheless, USW’s McCall, who has opposed the deal since it was proposed, said that, moving forward, USW is confident that with responsible management, “US Steel will continue to support good jobs, healthy communities, and robust national and economic security well into the future.”
There are also media reports saying US Steel might resume its search for a buyer.
One previous potential buyer was Cleveland Cliffs Inc., America’s second-largest steel producer, which in July 2023 bid $7.3 billion to acquire US Steel.
But the offer was rejected as being “unreasonable” by the Board of Directors of US Steel via a letter Cliffs received Aug. 13, 2023. The USW had endorsed the transaction and stated that it would not endorse anyone other than Cliffs for a transaction.
On Capitol Hill, U.S. Rep. Marcy Kaptor (D-OH) on Friday posted a video on X calling Biden’s blockage of the Nippon-US Steel deal a big victory. “As a member of the Steel Caucus, I am cheering as this day begins,” the congresswoman said. “Congratulations to the U.S. steel industry.”
Biden also in his announcement said it’s his “solemn responsibility as president” to ensure that America has a strong domestically owned and operated steel industry that can continue now and into the future.
“It is a fulfillment of that responsibility to block foreign ownership of this vital American company,” said Biden. “US Steel will remain a proud American company — one that’s American-owned, American-operated, by American union steelworkers — the best in the world.”