Washington – President Joe Biden has taken a strong stance against the proposed purchase of American company U.S. Steel by Japan’s Nippon Steel, announcing on Friday that he is blocking the $14.9 billion takeover. This decision comes after months of public opposition from Biden, who cited concerns about national security and critical supply chains.
In his statement, Biden stated that the acquisition would place one of America’s largest steel producers under foreign control, posing a risk to national security. While he did not provide specific details on how the deal would jeopardize national security, his decision to block the takeover is seen as a victory for workers of the Pittsburgh-based company, located in the crucial swing state of Pennsylvania.
The powerful United Steelworkers union, which endorsed Biden in March during his reelection campaign, has been a vocal opponent of the proposed acquisition. This decision by Biden is a clear demonstration of his commitment to protecting American workers, particularly in the steel sector.
Matthew Goodman, director of the RealEcon Initiative at the Council on Foreign Relations, believes that this was a political decision that Biden had been considering for some time. He stated, “He is determined to show that he will protect American workers, especially in the steel industry. While the steel sector is important and has been subject to unfair trade practices, it is difficult to understand the national security rationale behind blocking this transaction.”
Under federal law, the president has the power to block a transaction based on the recommendation of the Committee on Foreign Investment in the United States (CFIUS), which is chaired by Treasury Secretary Janet Yellen and includes other Cabinet members. Last month, CFIUS was unable to reach a consensus on the potential national security risks of the deal.
Biden’s decision to block the acquisition comes in the final days of his presidency, despite warnings from some analysts and advisers that it could damage relations with Japan, a key ally and trade partner of the United States. With the incoming Trump administration vowing to impose high tariffs on trading partners, there were concerns about a potential trade war.
John Ferrari, nonresident senior fellow at the American Enterprise Institute, believes that the United States needs allies, especially in the face of a potential conflict with China. He stated, “Japan is a staunch ally in the Pacific, with expertise in shipbuilding and manufacturing. Allowing them to invest in the United States would make us stronger.”
President-elect Donald Trump, who will take office on January 20, also opposed the acquisition. In a social media post in November, he promised to block the deal and use tax incentives and tariffs to boost U.S. Steel.
Both Nippon Steel and U.S. Steel have announced their intention to pursue legal action, claiming that the U.S. government did not follow proper procedures in considering the acquisition. In a joint statement, the companies said, “The President’s statement and Order do not present any credible evidence of a national security issue, making it clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights.”
This decision by Biden follows other protectionist measures taken by his administration. Last year, he tripled tariffs on steel imports from China, citing unfair trade practices that have led to job losses and factory closures in the United States.
In his statement on Friday, Biden emphasized the importance of protecting U.S. steel companies from unfair trade practices. He stated, “For too long, U.S. steel companies have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, resulting in job losses and factory closures in America.”
Biden’s decision to block the acquisition of U.S. Steel by Nippon Steel is a clear indication of his commitment to protecting American workers and industries. While some may argue that this decision could harm relations with Japan, it is a necessary step in ensuring the strength and security of the American economy. As we move forward, it is important to prioritize the interests of American workers and industries, and Biden’s decision to block this acquisition is a step in the right direction.
