Surprising Move by Biden Shakes Up Major U.S. Industry Deal

President Biden is poised to block Japan’s Nippon Steel from acquiring U.S. Steel, citing national security concerns and the importance of preserving American ownership of this iconic company.

At a Glance

Biden expected to block $15 billion Nippon Steel-U.S. Steel deal on national security grounds.
Committee on Foreign Investment in the United States (CFIUS) scrutinizing the deal.
U.S. Steel shares plummeted 23% following reports of the expected block.
Decision faces criticism for potential harm to U.S. reputation in international markets.
Steelworkers Union and key political figures oppose the deal.

Biden’s Stance on U.S. Steel Ownership

President Joe Biden is preparing to take a firm stance on the proposed acquisition of U.S. Steel by Japan’s Nippon Steel. The $15 billion deal, announced in December, has faced intense scrutiny from the Biden administration and lawmakers, with concerns ranging from potential job losses to the risk of production moving overseas under foreign ownership.

The President has consistently emphasized the importance of U.S. Steel remaining under American ownership. Earlier this year, Biden stated, “it is vital for it to remain an American steel company that is domestically owned and operated.” This sentiment has been echoed by Vice President Kamala Harris and aligns with the administration’s broader strategy to protect key industries from foreign control.

National Security Concerns and Economic Implications

At the heart of this decision is the Committee on Foreign Investment in the United States (CFIUS), a powerful interagency group led by Treasury Secretary Janet L. Yellen. CFIUS, which includes members from various government departments, is tasked with assessing the national security implications of foreign investments in U.S. companies.

The potential blocking of this deal has significant economic implications. U.S. Steel’s stock price dropped more than 22%, reaching approximately $27.75 per share, its lowest since August 2023. This dramatic fall underscores the market’s reaction to the uncertainty surrounding the deal’s future.

Political and Labor Considerations

The Steelworkers Union’s opposition to the deal adds another layer of complexity to the situation. Pennsylvania, a key swing state where U.S. Steel has a significant presence, finds itself at the center of this debate. Both President Biden and former President Donald Trump have expressed opposition to the sale, highlighting its political significance in the upcoming election year.

“The Japanese players appear not to be fully aware of the situation they got themselves in, buying a Pennsylvania steel company in the middle of a presidential election,” Jonathan Grady, the founding principal of the consultancy firm Canary Group, told CBS MoneyWatch. –

U.S. Steel CEO David B. Burritt has emphasized the benefits of the deal and warned of potential consequences if it fails, including the closure of blast furnace facilities and the risk of thousands of job losses. The company has also indicated that the merger’s failure could lead to questions about its headquarters remaining in Pittsburgh.

International Relations and Market Reputation

Legal experts warn that blocking the deal could harm the U.S.’s reputation for open markets and potentially strain relations with Japan, a key ally. This decision comes at a time when Japan is facing its own political uncertainty, with Prime Minister Fumio Kishida stepping down soon.

As the situation continues to unfold, the Biden administration faces the challenge of balancing national security concerns with maintaining the United States’ position as a leader in open markets and international trade. The final decision on this deal will likely have far-reaching implications for U.S. economic policy, labor relations, and international partnerships.