President Joe Biden blocked the Japanese company Nippon Steel’s $14 billion bid to buy U.S. Steel on Friday, saying it posed a threat to national security.
"It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad," Biden said in a statement. "And it is a fulfillment of that responsibility to block foreign ownership of this vital American company."
Biden’s announcement came after the Committee on Foreign Investment in the United States (CFIUS) last month opted not to give Biden a formal recommendation about whether the deal should be allowed following a months-long review. The committee, chaired by Treasury Secretary Janet Yellen, did, however, express concerns that the takeover could present a significant national security threat to the United States by potentially decreasing American steel production, the New York Times reported.
"As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains," Biden said.
Nippon, in a response letter to CFIUS, accused the White House of "impermissible influence" in the process. Nippon argued that the issues raised by CFIUS were "littered with factual inaccuracies and omissions, misleading and incomplete statements, conjecture and hypotheticals that have no basis in fact and are plainly illogical."
Nippon has said that it was prepared to take legal action against the United States if the deal was blocked, the Washington Post reported.
U.S. Steel shareholders approved the acquisition in April, but the powerful United Steelworkers union staunchly opposed the deal, citing concerns that Nippon would not invest in U.S. plants or preserve worker’s pensions, the Times reported. U.S. Steel’s takeover emerged as a key issue ahead of the 2024 presidential election, as Biden, Vice President Kamala Harris, and President-elect Donald Trump all publicly said the steel company based in battleground Pennsylvania should remain American-owned.
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