President Joe Biden blocked the $14.9 billion sale of U.S. Steel to Japan’s Nippon Steel on Friday, one of his final acts in office. This decision, foreshadowed by the White House’s December call for “serious scrutiny” of the deal, comes as no surprise given Biden’s previously stated preference for U.S. Steel to remain under domestic control. The sale was under review by the Committee on Foreign Investment in the United States (CFIUS), an executive branch body.
Biden justified his action in a statement, emphasizing the importance of maintaining a strong, domestically owned steel industry for national security and critical supply chains. He asserted that allowing the acquisition would pose unacceptable risks. “We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden stated. He further declared his responsibility to ensure a robust American steel industry, both domestically and internationally, concluding, “U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.”
The United Steelworkers (USW) International union, a powerful labor group and key component of Biden’s political base, had actively campaigned against the sale. Following the announcement, USW President David McCall expressed gratitude for Biden’s intervention, emphasizing the positive impact on union members and national security. He expressed confidence in U.S. Steel’s continued success under responsible management.
However, U.S. Steel and Nippon Steel vehemently criticized the decision in a joint statement, expressing dismay and vowing to protect their legal rights. They argued that the blocked transaction would deny billions of dollars in planned investment for U.S. facilities, jeopardizing thousands of jobs. The companies accused Biden of prioritizing his political agenda over the future of American steelworkers, alleging a politically motivated and pre-determined CFIUS evaluation.
U.S. Steel’s President and CEO, David B. Burritt, issued a separate scathing statement, denouncing the decision as “shameful and corrupt,” accusing Biden of political payback to the USW and harming the company, its workers, and national security. He further criticized the President for not meeting with U.S. Steel leadership to consider their perspective.
Biden invoked the Defense Production Act to block the sale, citing the national security implications of a weakened domestic steel industry. The conflicting statements highlight a significant disagreement over the economic and national security ramifications of the deal, leaving the future of U.S. Steel, and the legal battles to follow, uncertain.