President Joe Biden announced Friday his decision to block a $14 billion purchase of US steel by Japan’s Nippon Steel, saying domestically produced steel is vital to US national security.
“Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” Biden said in a statement.
The move marks the latest effort by the Biden administration to protect US markets from foreign companies.
Biden has preserved many of the tariffs imposed by former President Donald Trump, and earlier this month he introduced legislation that would have banned China-based social media platform TikTok unless the company finds a new parent company. The Supreme Court will hear arguments this month in an appeal filed by TikTok.
Nippon Steel strongly criticized the decision a statement on Friday, suggesting the company may take legal action.
“We are dismayed by President Biden’s decision to block Nippon Steel’s acquisition of US Steel,” Nippon Steel said. “The President’s statement and Executive Order present no credible evidence of a national security issue, making it clear that this was a political decision.”
“Following President Biden’s decision, we have no choice but to take appropriate action to protect our legal rights,” the company added.
The decision comes weeks after a federal panel declined to issue a recommendation on the US Steel-Nippon Steel merger, leaving Biden with the option to block the deal.
The Committee on Foreign Investment in the United States, tasked with reviewing the potential acquisition, shared concerns about the national security risks of losing the country’s second-largest steel producer.
President Joe Biden speaks about proposed Chinese steel tariffs at the United Steelworkers headquarters in Pittsburgh, April 17, 2024.
Kyle Mazza/Anadolu via Getty Images, FILE
In response to the commission’s decision, Nippon Steel alleged that the White House had “unduely influenced” the review. Nippon Steel has threatened to challenge the White House’s decision in court.
The fate of US Steel – the famous 120-year-old company based in Pittsburgh, Pennsylvania – turned into a lightning rod during the 2024 election season.
During the campaign, President-elect Donald Trump repeatedly said he would block Nippon’s acquisition of US Steel. In December, Trump repeated this position.
“I am totally against big, powerful US steel being bought by a foreign company,” Trump said. “Buyer beware!!!”
In a statement on Friday, Biden said the decision to block the merger reflected his priority at the intersection of the nation’s economic interests and national security.
“As I’ve made clear from day one: I will never hesitate to act to protect the security of this nation and the resilience of its infrastructure and supply chains,” Biden said.
Shares of US Steel fell about 7% in early trading on Friday.
