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President Joe Biden is expected to block a $15 billion deal by Japan’s Nippon Steel to buy US Steel, ending months of frantic lobbying and dealing a setback to Washington’s relationship with its closest ally Asia – Peaceful.
In one of his final acts in government, Biden – long opposed to the takeover – is expected to announce as early as Friday his decision to kill the proposed acquisition of the iconic US steelmaker, according to two people familiar with the matter.
One of those people said the White House had not yet notified Nippon Steel of the decision.
The president’s expected move comes after an interagency investment review review, known as the Committee on Foreign Investment in the US (Cfius), failed to reach consensus by a Dec. 23 deadline on whether the acquisition posed a security threat. national.
Two people close to the situation said Nippon Steel is likely to take legal action against the outgoing president’s decision.
One person said such a move, during the discovery process, could reveal the extent to which the decision was driven by politics rather than national security concerns. The process would also expose the limitations of the Cfius process and its vulnerability to political interests.
Nippon Steel declined to comment.
President-elect Donald Trump had also threatened to scrap the deal and vowed to protect the Pittsburgh-based company through a mix of tariffs and tax incentives.
The end of the year-long saga marks the failure of a bold play by the Japanese group that quickly became a sensitive political issue in an election year. It also represents a significant departure from the long-term open US investment environment.
Biden’s decision risks undercutting four years of work to reassure allies like Japan of their special relationship with the US amid strategic competition with China and a shift toward protectionism, support for unions and an “America First” sentiment in American politics. .
US and Japanese government officials fear broader consequences for investment and M&A by Japan and other partners in the Americas and implications for the viability of the US-Japan alliance.
Takahiro Mori, a vice president at Nippon Steel, led the Japanese steelmaker’s latest effort to win over government officials and union members in Washington and Pennsylvania.
Those efforts included a new proposal this week that offered the government a veto over any reductions in steelmaking capacity at most of Nippon Steel’s U.S. plants, adding a series of other job and investment guarantees.
The move followed concerns from Cfius that US Steel could reduce domestic steel production under Japanese ownership, affecting industries of national importance.
Those moves did little good, though, even as some of Biden’s top advisers tried to talk him out of blocking the deal.
Her death marks a victory for Katherine Tai, the US trade representative, and David McCall, president of the United Steelworkers union, who were the two staunchest opponents of the deal.
