Biden Set to Prevent Nippon’s Acquisition of US Steel

President Joe Biden is poised to announce a decision to block Nippon Steel’s proposed $14.9 billion acquisition of U.S. Steel, according to several sources familiar with the situation. These sources, who requested anonymity to discuss an undisclosed decision, were first reported by the Washington Post.

A White House spokesperson has indicated that they cannot confirm the decision at this time. She mentioned that the next step requires Biden to receive recommendations from the Committee on Foreign Investment in the United States (CFIUS), which is an interagency committee led by the Treasury Department.

CFIUS evaluates foreign investments to identify potential national security risks. While most cases are resolved before reaching the White House, there are times when the president must make the final call. The spokesperson could not provide a timeline for when the CFIUS recommendations might be presented, and a Treasury official declined to comment. Upon receiving the recommendations, Biden will have 15 days to announce his decision.

Biden has previously voiced his opposition to the acquisition, emphasizing that U.S. Steel, a company of historical significance, should remain American-owned. This sentiment was reinforced by Vice President Kamala Harris during a recent trip to Pittsburgh, expressing that strong American steel companies are essential for the nation.

“U.S. Steel is an historic American company, and it is vital for our nation to maintain strong American steel companies,” Harris stated. “I couldn’t agree more with President Biden; U.S. Steel should remain American-owned and American-operated.”

Harris and Minnesota Governor Tim Walz are scheduled to visit Pittsburgh, home to U.S. Steel’s headquarters and the Steelworkers union, which has been vocal in its opposition to the acquisition.

In an interesting political twist, former President Donald Trump has threatened to block the deal should he succeed in defeating Harris in the upcoming election. Blocking the acquisition before election day could allow Biden and Harris to claim credit for the decision, although Trump might argue he was a driving force behind it.

Nancy McLernon, president and CEO of the Global Business Alliance, which advocates for foreign investment in the U.S., expressed concern over the motivations behind the potential blockage. “The decision to block this deal could only be based on perceived political brownie points,” she remarked. “And ironically, Pennsylvania’s steelworkers would suffer. Additionally, the decision would send an unfortunate message to our allies.”

Nippon Steel has refrained from commenting on the prospective decision, while U.S. Steel has stated it has not yet been informed of any imminent decision related to the acquisition process.

U.S. Steel expressed, “We have not received any update or executive order in relation to the CFIUS process. We continue to stand by our belief that there are no national security issues associated with this transaction, as Japan is one of our most staunch allies. We fully expect to pursue all possible options under the law to ensure this transaction, which is the best future for Pennsylvania, American steelmaking, and all our stakeholders, closes.”

In a stark warning earlier, U.S. Steel outlined the potential consequences of blocking the deal. They noted, “Without the Nippon Steel transaction, U.S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk and negatively impacting numerous communities tied to our operations.”

The company also raised concerns that the absence of a deal could create “serious questions about U.S. Steel remaining headquartered in Pittsburgh.” The loss of U.S. Steel, which has been manufacturing steel in the region since 1901, would significantly impact local jobs, tax revenue, and community contributions.

The proposed acquisition has faced significant pushback from lawmakers across the political spectrum. Senator Sherrod Brown (D-Ohio) condemned the deal as harmful for American workers, stating, “This has always been a terrible deal for American workers, made behind closed doors with Steelworkers kept out of the room.”

In response to Harris’ comments, Nippon Steel defended the acquisition, asserting, “We’re confident that Nippon Steel’s acquisition of U.S. Steel will revitalize the American steel rust belt, benefit American workers, local communities, and national security in a way no other alternative can. We believe that a fair and objective regulatory review process will support this outcome, and we look forward to closing the transaction as soon as possible.”