Biden blocks $15 billion Nippon Steel bid for US Steel over national security concerns

The proposed deal kicked up an election year political maelstrom across America's industrial heartland and blocking it drew a threat of litigation from Nippon Steel. “We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America's national interests,” Biden said in a Friday morning statement.

Nippon Steel and US Steel blasted the decision, saying in a joint statement that Biden's blocking the deal “reflects a clear violation of due process and the law” in a process it said was “manipulated” to advance Biden's political agenda.

It also insisted that Biden cited no credible evidence of the deal presenting a national security problem and suggested it will sue, saying “we are left with no choice but to take all appropriate action to protect our legal rights.” Biden's decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden. He had 15 days to reach a final decision.

The committee, chaired by Treasury Secretary Janet Yellen and made up of other Cabinet members, can recommend that the president block a transaction, and federal law gives the president that power.

 The decision comes just weeks before the Democratic president is set to leave office and could damage relations between the US and Japan, which is America's biggest ally in Asia and its largest foreign holder of US debt.

In their statement, the two steel companies said it's “shocking — and deeply troubling” that the US would reject a transaction that advances US interests and “treat an ally like Japan in this way.” “Unfortunately, it sends a chilling message to any company based in a US allied country contemplating significant investment in the United States,” the companies said.

Biden previously came out against the deal last March during the presidential campaign — and was backed by the United Steelworkers, concerned over whether the company would honour existing labour agreements or slash jobs, as well as over the firm's financial transparency.

“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said in a March statement, while he was still seeking reelection to the presidency before dropping out of the race.

“US Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.” President-elect Donald Trump has also opposed the acquisition and vowed in December on his Truth Social platform to block the deal and to use tax incentives and tariffs to grow the company.

On Friday,3 Jan ‘24 Steelworkers President David McCall said the union is grateful for Biden's move to block the sale and called it the “right move for our members and our national security.”..“Allowing it to purchase US Steel would have offered it the opportunity to further destabilise our trade system from within and in the process, compromise our ability to meet our own national security and critical infrastructure needs,” McCall said.

McCall insisted that US Steel has the financial wherewithal to make the company strong and resilient. A growing number of conservatives and business groups like the US Chamber had publicly backed the deal...