Biden blocks takeover of US Steel by Japan's Nippon Steel, citing national security

A water tower at US Steel Corp.'s Edgar Thomson Works steel mill. in Braddock, Pennsylvania on September 4, 2024.

Justin Merriman | Bloomberg | Getty Images

President Joe Biden on Friday officially blocked the takeover of US Steel by Japan's Nippon Steel, keeping his promise to keep a more than century-old industrial name under national ownership.

Biden said Nippon's proposed $14.9 billion acquisition would place one of the largest U.S. steel producers under foreign control, creating risk for the country's critical supply chains .

“Today's action reflects my unwavering commitment to using every authority available to me as President to defend America's national security, including ensuring that American businesses continue to play a role central in sectors critical to our national security,” Biden said in a statement. .

US Steel stock opened down more than 7% following the president's announcement. Biden's action comes after a months-long review of the deal by the Committee on Foreign Investment in the United States.

The United Steelworkers union fiercely opposed the takeover by Nippon from the day it was announced in December 2023. Biden had signaled as early as March 2024 his intention to block the sale, supporting the United Steelworkers' opposition to the deal.

USW International President David McCall praised Biden's decision in a statement on Friday. The union boss called Nippon “a serial cheater who for decades worked to undermine our domestic industry by dumping its products on our market.”

“Allowing him to purchase US Steel would have given him the opportunity to further destabilize our trading system from within and, in doing so, undermine our ability to meet our own national security and critical infrastructure needs.” , McCall said.

Biden's decision to torpedo the deal underscores a bipartisan swing toward protectionism in the United States, as Democrats and Republicans seek to maintain domestic control over key industries as geopolitical tensions escalate around the world.

President-elect Donald Trump also opposed the deal.

Biden's decision to block the sale shows that even staunch allies like Japan are not immune to the growing protectionist tide. Tokyo plays a central role in Washington's efforts to contain China's ambitions in the Indo-Pacific region.

US Steel and Nippon said the deal was the best way to maintain the company's competitiveness, revitalize America's Rust Belt communities and strengthen national security. US Steel CEO David Burritt previously warned the company would likely close plants if the deal fell through.

US Steel and Nippon Steel did not immediately respond to CNBC's requests for comment.

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