President Joe Biden blocked the purchase of U.S. Steel by Japan’s Nippon Steel on Friday morning.
Biden announced in a statement he had made the decision due to “credible evidence” that the purchase could threaten national security. The Japanese corporation had offered to acquire the company for $14.9 billion.
“Today’s action reflects my unflinching commitment to utilize all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security,” Biden said.
Biden said that a White House committee of national security and trade experts determined that the acquisition would create national security and supply chain risks.
The deal faced immediate blowback when it was announced in 2023, particularly in the Rust Belt, where U.S. Steel has been a fixture since its formation in 1901.
The Committee on Foreign Investment in the United States, better known as CFIUS, said in a letter last month that the acquisition could raise national security concerns if it led to a decline in domestic steel production.
But U.S. Steel, whose shareholders approved the deal in April, has warned that it will be forced to downsize and cut jobs if the sale is called off.
Notably, while Biden cited national security concerns in blocking the acquisition, Japan is a key ally to the U.S. in Asia, where U.S. allies are key in containing geopolitical rival China’s growing influence. Japanese Prime Minister Shigeru Ishiba had asked Biden to approve the deal.
Bejing has ratcheted up steel production. The majority of the world’s biggest steel producers are now based in China. Some argued that allowing the merger to go through would improve U.S. national security standing by infusing the industry with investment and boosted production.
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The move comes mere weeks before Biden leaves office and President-elect Donald Trump, a populist who had vowed to “instantaneously” block the deal upon assuming the presidency. The Washington Examiner reached out to the Trump team for comment.
U.S. Steel’s stock plunged upon the news of the blocked acquisition. The steelmaker’s stock was down about 8% in pre-market trading on Friday morning.