President Joe Biden concluded one of his final presidential acts by blocking the sale of U.S. Steel to the Japanese company Nippon Steel. This decision, announced early Friday, came as no surprise, given Biden’s previously stated preference for U.S. Steel to remain under domestic ownership and operation. In December, the White House had already called for “serious scrutiny” of the $14.1 billion deal, which was then under review by the Committee on Foreign Investment in the United States (CFIUS).
In a Friday statement, Biden justified his decision, emphasizing the importance of maintaining a strong, domestically owned steel industry for national security and economic interests. He stated, “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. As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.” He further asserted that blocking the sale was his “solemn responsibility” to ensure a robust American steel industry.
The $14.9 billion sale (including debt assumption) faced opposition from the United Steelworkers International union, a powerful labor group and key part of Biden’s political base. The union had consistently urged Biden to prevent foreign acquisition of U.S. Steel, renewing this request in a Wednesday social media post. Following Biden’s announcement, USW President David McCall expressed gratitude, stating the decision was “the right move for our members and our national security” and highlighting Biden’s “lifelong commitment to American workers.”
However, U.S. Steel and Nippon Steel responded with a joint statement expressing dismay and vowing to protect their legal rights. They argued that the blocked transaction would have resulted in billions of dollars in investment in U.S. facilities, preventing the deterioration of aging infrastructure and protecting thousands of jobs. They accused Biden of prioritizing his political agenda over the future of American steelworkers and criticized the CFIUS evaluation process as “deeply corrupted by politics” and “pre-determined.”
U.S. Steel’s President and CEO, David B. Burritt, issued a separate, strongly worded statement, labeling the decision a “shameful and corrupt” deal that would harm the company, its workers, and national security. He accused Biden of political favoritism towards the union and of jeopardizing American competitiveness, claiming that “The Chinese Communist Party leaders in Beijing are dancing in the streets.” Burritt also criticized Biden for not meeting with U.S. Steel leaders to discuss the facts.
Biden based his order on the Defense Production Act, which allows presidential intervention in private industrial matters affecting national security. He maintained that a strong domestic steel industry is crucial for national security. The conflicting statements highlight the significant political and economic implications of this decision.