President Biden is formally blocking the sale of U.S. Steel to a Japanese buyer, saying production of the alloy is critical for infrastructure and defense and should remain in American hands.
For months, Mr. Biden had looked askance at the $14 billion deal, but Nippon Steel officials were hoping to close it in the waning days of his presidency.
“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Mr. Biden said Friday.
U.S. Steel is an iconic Pennsylvania-based company founded in 1901. Its product is in skyscrapers and bridges across America.
Yet the company’s financial fortunes and workforce have dwindled, and shareholders approved the Japanese takeover bid earlier this year.
Some union workers opposed the deal, saying Nippon couldn’t be trusted to invest in the company and help workers. The situation became a campaign-year issue.
Mr. Biden closed the door to Nippon Steel days before President-elect Donald Trump took office. Mr. Trump also opposed a foreign purchase of U.S. Steel and warned Nippon not to close the deal under Mr. Biden, declaring “Buyer Beware” on social media.
Mr. Trump appeared to soften the blow to Japanese investment writ large by touting a planned $100 billion investment in the U.S. by SoftBank, a major Japanese tech company.
Mr. Biden’s decision on U.S. Steel could dissuade other foreign companies from attempting mergers and takeovers in critical sectors of U.S. security. It also risks rankling Japan, a key ally against Chinese aggression in the Indo-Pacific.
Nippon Steel, the fourth-largest steelmaker in the world, said the deal was critical to its company’s growth and would be a win for workers in the Rust Belt.
Mr. Biden pointed to findings from The Committee of Foreign Investment in the United States, which said putting a major steel producer under foreign control would pose risks to national security and supply chains.
The president, who leaned on his blue-collar and son-of-Scranton bona fides to win political office, also said more than 100 new steel and iron mills had opened since I took office.
“Today, the domestic steel industry is the strongest it has been in years,” Mr. Biden said. “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.”
The Japanese firm has said in the past it would consider legal action if the acquisition were blocked. Nippon Steel could face a $565 million penalty for breach of contract with U.S. Steel if the deal is not completed, Japan’s Kyodo News reported Friday.
Japanese Prime Minister Shigeru Ishiba personally lobbied Mr. Biden to approve the deal in November, the Reuters news agency reported, warning a rejection could harm economic ties between the two allies.
Japan is the top foreign investor in the U.S. market, with $783.3 billion in foreign direct investment in 2023.
• David R. Sands contributed to this story.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.