President Joe Biden blocked Nippon Steel’s bid to purchase U.S. Steel due to national security risks on Friday, Jan. 3. Before making it official, multiple media outlets reported on Biden’s decision.
“As I have said many times, steel production—and the steel workers who produce it—are the backbone of our nation,” Biden said in a statement. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
According to reports, senior advisers warned Biden that the U.S. rejecting the Japanese corporation’s $14.9 billion offer could damage relations between the two countries.
Biden’s decision comes after the interagency Committee on Foreign Investment could not conclude the risks of Nippon’s offer, leaving the decision up to the White House.
“We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said. “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.”
While U.S. Steel shareholders backed the takeover, the proposed deal faced opposition from union members and politicians, including President Biden and President-elect Donald Trump.
“So, that is why I am taking action to block this deal. 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; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company,” Biden said.
“U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.”
Trump, backed by a group of American steelworkers during his campaign, also vowed to block the deal when he takes office later this month.
Nippon Steel and U.S. Steel indicated they would take legal action if the federal government blocked the deal.
“Today’s action reflects my unflinching commitment to utilize all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security,” Biden said.
“As I have made clear since day one: I will never hesitate to act to protect the security of this nation and its infrastructure as well as the resilience of its supply chains.”
