President Biden is blocking the $14.9 billion takeover of U.S. Steel by Japan's Nippon, citing national security concerns.
Biden said in a statement that domestic ownership and control of steelmaking capacity is vital to both security and the resiliency of U.S. supply chains.
"Without domestic steel production and domestic steel workers, our nation is less strong and less secure," Biden wrote. "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."
The move marks an unusual exercise of presidential power to halt a commercial transaction with a key U.S. ally. It's a win for the United Steelworkers union, which had strongly opposed the deal. President-elect Donald Trump had also spoken out against the sale. U.S. Steel is headquartered in the politically important swing state of Pennsylvania.
Despite its storied history, U.S. Steel is no longer the industrial giant it once was. The 124-year-old company is only the third largest steelmaker in the country, responsible for less than 20% of domestic steel production. An inter-agency committee that supervises foreign investment in the U.S. was unable to reach agreement on whether the sale posed a threat to national security, leaving the decision up to the president himself.
Nippon Steel lobbied hard to salvage the deal, promising to preserve domestic production. The company had also promised to invest nearly $3 billion in U.S. Steel's aging blast furnaces in Pennsylvania and Indiana. Without that money, U.S. Steel has suggested it may shift its focus to non-union plants elsewhere, jeopardizing thousands of union jobs.
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