United States President Joe Biden is reportedly set to formally block the US$14.1 billion (A$22.1 billion) sale of U.S. Steel to Japan's Nippon Steel, citing national security concerns as political and union opposition mounts.
The Committee on Foreign Investment in the United States (CFIUS) is expected to refer its review of the deal to Biden by December 22 or 23. Sources familiar with the matter indicated to Bloomberg News that Biden plans to reject the sale, aligning with his long-standing stance that U.S. Steel should remain domestically owned and operated.
White House spokesperson Saloni Sharma stated, “The President’s position since the beginning is that it is vital for U.S. Steel to be domestically owned and operated. The CFIUS process was and remains ongoing.”
The fate of U.S. Steel has become a politically charged issue. Both President-Elect Donald Trump and Biden have expressed opposition to the deal. Trump reiterated his position earlier this month, stating, “I am totally against the once great and powerful U.S. Steel being bought by a foreign company.”
U.S. Steel shares dropped over 9.7% following reports of Biden’s expected decision. Company spokeswoman Amanda Malkowski argued, “This transaction should be approved on its merits.”
Nippon Steel issued a strong rebuttal, stating, “It is inappropriate that politics continue to outweigh true national security interests — especially with the indispensable alliance between the U.S. and Japan.” Nippon added confidence in the U.S. legal system and suggested it would consider litigation if the merger is blocked.
Union opposition has also been fierce. The United Steelworkers union criticised Nippon Steel’s offer of a $5,000 bonus for workers as “attempted bribery”, asserting that it does little to address the deal’s long-term implications. The union stated, “We won’t be fooled. This offer ultimately does nothing to change the stakes of the deal.”
Nippon Steel has sought to gain support by pledging $2.7 billion in investments, including $1 billion for upgrades to U.S. Steel’s Mon Valley Works. The Japanese firm also promised to maintain union jobs and U.S. Steel’s headquarters in Pittsburgh. However, union leaders and Pennsylvania Governor Josh Shapiro remain sceptical.
Shapiro, focused on safeguarding Pennsylvania jobs, remarked, “I’m less about social media posts and more about doing the hard work.”
If Biden blocks the deal, both U.S. Steel and Nippon Steel are expected to pursue litigation. Republican lawmakers have criticised the Biden administration, suggesting the CFIUS process has been influenced by political interests.
The timing of Biden’s announcement remains uncertain, though he has 15 days from the referral to decide. An extension to the CFIUS review is not anticipated, making it likely that Biden’s decision will be final.