WASHINGTON, DC, USA – President Joe Biden has blocked the $14.9 billion takeover of US Steel by Japan’s Nippon Steel, citing national security concerns and delivering on a campaign promise to prioritise domestic control of critical industries.
The decision, announced Friday, January 3, 2025, follows months of political pressure and raises questions about the future of US Steel, a 124-year-old company that has struggled to compete in the modern steel market.
“A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” Biden said.
“Steel powers our country: our infrastructure, our auto industry, and our defence industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.”
Political and Union Pressure
The decision aligns with Biden’s longstanding pledge to protect American workers and industries.
The United Steelworkers union had vocally opposed the deal, arguing it jeopardised the future of the US steel industry.
“We’re grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers,” said union President David McCall.
The transaction became a political flashpoint during the 2024 presidential campaign, with both Biden and President-elect Donald Trump opposing the deal.
Trump and Vice President-elect JD Vance used the issue to appeal to union workers, particularly in Pennsylvania, a key swing state.
Nippon Steel and US Steel Respond
Nippon Steel and US Steel condemned Biden’s decision, calling the process “corrupted” by political motivations.
“We believe that President Biden has sacrificed the future of American steelworkers for his own political agenda,” the companies said in a joint statement.
They argued that the decision sends “a chilling message to any company based in a US allied country contemplating significant investment in the United States.”
The companies had pledged not to cut jobs and had offered concessions, including funding a workforce training centre and granting the government veto power over production cuts. Despite these efforts, Biden’s concerns about foreign ownership prevailed.
The companies have vowed to take legal action to protect their rights, stating they will “take appropriate action to protect their legal rights.”
Impact on US Steel and Bilateral Relations
US Steel has warned that without the investment promised by Nippon Steel, it may have to close factories. Once a symbol of American industrial strength, the company now faces an uncertain future.
The decision also risks straining relations with Japan, a close US ally.
Professor Stephen Nagy of the International Christian University in Tokyo called Biden’s move “political” and a continuation of Trump’s “America First” agenda.
“This was a direct response and continuation of the Trump MAGA agenda of Making America Great Again,” Nagy said.
“The Biden administration couldn’t appear weak on foreign businesses, whether it’s an ally or adversary.”
Looking Ahead
The companies could attempt to renegotiate the deal under the incoming Trump administration, potentially offering terms that allow Trump to claim credit for a better agreement.
“Japan is a very close US ally,” said political analyst Terry Haines of Pangaea Policy.
“The government’s got frankly a big evidentiary burden in order to justify what they’re doing today – and it hurts bilateral relations with Japan, something Trump will want to avoid.”
Biden’s order gives the Committee on Foreign Investment in the United States (CFIUS) authority to extend the 30-day deadline to scrap the deal, leaving the door open for further negotiations.
Market Reaction
Shares in US Steel fell 5% following the announcement, reflecting investor concerns over the company’s path forward.
The blocked transaction underscores the growing intersection of politics and business, as national security concerns increasingly influence global investments.
Whether the deal is ultimately revived or permanently derailed, the decision represents a pivotal moment for the US steel industry and its role in the country’s economic and national security landscape.
