President Joe Biden has upheld his promise to block the proposed $15 billion acquisition of Pittsburgh-based U.S. Steel by Nippon Steel of Japan. Biden emphasized the importance of major U.S. companies leading the fight for America's national interests in a statement released on Friday morning.
The decision follows the Committee on Foreign Investment in the United States (CFIUS) failing to reach a consensus on the potential national security risks posed by the deal. The committee, chaired by Treasury Secretary Janet Yellen, submitted a report to Biden, who had 15 days to make a final decision as per federal law.
While some federal agencies expressed skepticism about the national security implications of a Japanese company acquiring an American steelmaker, Biden's rejection could strain relations with Japan, a key U.S. ally in Asia and the largest foreign holder of U.S. debt.
Biden's stance against the deal was supported by the United Steelworkers, who raised concerns about labor agreements, job security, and financial transparency. The President-elect at the time, Donald Trump, also opposed the acquisition and pledged to use tax incentives and tariffs to support the growth of U.S. Steel.
Nippon Steel's $14.1 billion cash offer to purchase U.S. Steel raised apprehensions about the impact on unionized workers, supply chains, and U.S. national security. Despite some backing from lawmakers and business groups like the U.S. Chamber, the deal faced opposition from key figures like Mike Pompeo, who argued that rejecting the deal would be shortsighted and that it could enhance the competitiveness of the American steel industry.
The rejection of the deal marks a significant development in the ongoing debate over foreign acquisitions of American companies and underscores the complexities of balancing economic interests with national security concerns.
