Biden cites the need to “level the playing field” in the long-awaited $14.6 billion sales impasse that is likely to strain ties with Tokyo.
United States President Joe Biden has blocked the $14.9 billion sale of Pittsburgh, Pennsylvania-based US Steel to Japan’s Nippon Steel.
Friday’s move deals a potentially fatal blow to the merger plan, which has been under review by the US government for a year.
Major Republicans and Democrats had widely opposed the merger during the 2024 presidential election campaign season. But while Biden had criticized the plan, he had held off on a final decision amid concerns over troubled relations with ally Japan.
In his statement announcing the move, Biden cited a strategic need to protect domestic industry. “This acquisition would place one of America’s largest steel producers under foreign control and create a risk to our national security and our critical supply chains,” he said.
“That is why I am taking action to block this deal.”
For their part, Nippon Steel and US Steel had characterized the merger as a lifeline for the US flagship, which is the second-largest US steelmaker. Nippon had paid a hefty price to make the purchase and faces a $565 million penalty for US Steel after the deal collapsed.
Opponents, including the powerful United Steelworkers (USW) union, warned that the Japanese owners would cut jobs after the takeover. Despite these warnings, there had been movement among some national union members in support of the merger.
Efforts by Nippon Steel to calm concerns by promising a pause on any layoffs or union facility closings through the union’s current contract, which expires in September 2026, failed to win wider acceptance of the deal. The company had also committed to moving its US headquarters to Pittsburgh.
On Friday, USW international president David McCall called the move “the right move for our members and our national security.”
“We are grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers,” McCall said.
Neither Nippon Steel, the office of Japanese Prime Minister Shigeru Ishiba, nor the country’s Ministry of Economy, Trade and Industry immediately responded to Biden’s announcement.
However, in a November letter, Ishiba had urged Biden to approve the merger to avoid disrupting recent efforts to strengthen ties between the two countries, according to Reuters news agency.
Japan is a key US ally in the Asia-Pacific region, and Tokyo and Washington have strengthened ties in recent years over shared concerns about China’s economic and military growth, as well as threats from North Korea.
“Backbone of our Nation”
The Committee on Foreign Investment in the US (CFIUS) previously spent months reviewing the deal over national security risks, but failed to reach a consensus.
The decision was then deferred to Biden, who was legally required to act before the expiration of a 15-day deadline.
In his statement, Biden said he was taking action to level the playing field, blaming US Steel’s downfall on unfair trade practices. He said a mix of protectionism and subsidies had brought the industry back to health.
“Steelmaking — and the steelworkers who make it — are the backbone of our nation,” Biden said.
“A strong domestically owned and operated steel industry represents a core national security priority and is critical to resilient supply chains.”
President-elect Donald Trump, who takes office on January 20, had also opposed the deal, previously describing the proposed sale as “a terrible thing”.
