President Biden announced Friday that he would block a $15 billion offer from Japan’s Nippon Steel. buy US steel This comes after a government committee recently failed to reach agreement on the potential national security risks posed by the deal.
Biden said the decision is aimed at protecting national security, infrastructure and supply chain resiliency. He said the United States needs domestic companies to account for the majority of the nation’s steelmaking capacity to “continue to lead the fight on behalf of America’s national interests.”
Mr. Biden opposed the agreement for a long time It announced its final decision pending a report on the merger issued by the Committee on Foreign Investment in the United States, known as CFIUS. An interagency committee chaired by Treasury Secretary Janet Yellen will review these transactions for potential national security risks and may block sales or impose conditions to protect national security. can be forced to change. CFIUS announced on December 23 that it was unable to reach an agreement on the deal and would leave it up to Biden.
“It is my solemn duty as President to ensure that America now and into the future has a strong, domestically owned and operated steel industry that can continue to provide sources of national strength at home and abroad. “We have a responsibility to prevent foreign ownership of this important American company,” the president said in a statement Friday announcing the decision to block the deal. “U.S. Steel will always be a proud American company, the best company in the world, American-owned, American-managed and run by the American Steelworkers union.”
A companion order signed by Biden banning the U.S. Steel acquisition plan said there was “credible evidence” that Nippon Steel “may engage in actions that could undermine the national security of the United States.”
The president’s statement read: “This action extends the full range of powers vested in me as president to protect the national security of the United States, including ensuring that American businesses continue to play a central role in areas critical to national security.” It reflects my unflinching determination to leverage the power of
Backed by the United Steelworkers union, Mr. Biden said earlier this year that it is “critically important that (U.S. Steel) remains a domestically owned and operated American steel company.”
But a U.S. official familiar with the matter, speaking on condition of anonymity to discuss the private report, said that some federal agencies participating in the committee are working with the Japanese-owned U.S.-owned steel manufacturer. He said he was skeptical that allowing the acquisition would pose a national security risk.
US Steel Sources familiar with the process indicated that if the president blocks the deal, he would likely file a lawsuit, including with the Biden administration. In addition to the Cleveland-Cliffs, which lost its bid to U.S. Steel, President Lourenco Goncalves and U.S. Steelworkers President Dave McCall could also be named.
Japan-based Nippon Steel on Tuesday proposed giving the U.S. government direct veto power over changes to U.S. Steel’s production capacity. The proposal is a slight modification of a CFIUS recommendation aimed at allaying concerns that Nippon Steel’s proposed acquisition of U.S. Steel could lead to a decline in domestic steel production and U.S. workforce reductions. .
Both Biden and President-elect Donald Trump courted U.S. Steel’s unionized workers during their presidential campaigns. vowed to block the takeover Amid concerns about foreign ownership of America’s major corporations. But the appeal of Nippon Steel’s acquisition was that it had the financial power to invest in and upgrade steel mills, which could help maintain steel production in the United States.
Trump also opposes the deal, vowing in a Truth Social post earlier this month to “prevent this deal from happening.” President Trump has proposed turning around U.S. Steel’s ailing business “through a series of tax breaks and tariffs.”
Steelworkers’ unions have doubts about Nippon Steel’s ability to maintain jobs at member plants, take advantage of collective bargaining benefits, or protect U.S. steel production from cheap foreign imports. He said that
In the face of political opposition, Nippon Steel and U.S. Steel mounted public relations campaigns to gain support from skeptics. U.S. Steel said in a statement Monday, Dec. 23, that the deal is “the best way to date to ensure U.S. Steel, including our employees, communities and customers, thrives into the future.”
As Nippon Steel began gaining support from some steel union members and local officials around the blast furnaces in Pennsylvania and Indiana, a growing number of conservatives publicly supported the deal. Many supporters said Nippon Steel has a stronger financial balance sheet than rival Cleveland-Cliffs to invest the cash needed to upgrade aging U.S. Steel blast furnaces.
Nippon Steel has manufacturing operations in the United States, Mexico, China, and Southeast Asia. It supplies the world’s top automakers, including Toyota Motor Corporation, and manufactures steel for railways, pipes, home appliances, and skyscrapers.
In September, Mr. Biden issued an executive order expanding the factors the Committee on Foreign Investment in the United States considers when reviewing transactions, including how a transaction would impact the U.S. supply chain and how it would impact U.S. citizens. We considered whether sensitive personal data would be at risk. risk.
Kathryn Watson, Melissa Quinn, Jennifer Jacobs,
contributed to this report.
