President Joe Biden has voiced explicit opposition to the proposed acquisition of U.S. Steel Corp by Japan’s Nippon Steel, valued at $14.9 billion. Biden emphasized the importance of U.S. Steel maintaining its status as an American-owned and operated company, citing its iconic presence in the American steel industry for over a century.
While Biden’s stance underscores the significance of safeguarding U.S. ownership of critical industries, particularly in terms of national security, the specific actions he may take to prevent the deal remain uncertain. The Committee on Foreign Investment in the United States (CFIUS), responsible for reviewing foreign investments in U.S. companies, holds the authority to recommend blocking the acquisition on national security grounds.
Nippon Steel, in response to Biden’s opposition, reiterated the benefits the acquisition would bring to U.S. Steel, union workers, the American steel industry, and national security. The Japanese firm expressed commitment to navigating the regulatory review process, including CFIUS, while assuring compliance with legal procedures and due process.
Addressing concerns about potential job losses, Nippon Steel assured that there would be no layoffs or plant closures until September 2026 under specific conditions. Despite these assurances, shares of U.S. Steel experienced a significant decline following Biden’s statement, falling below the proposed deal price.
In light of the potential unraveling of the deal with Nippon Steel, Cleveland-Cliffs CEO Lourenco Gonsalves hinted at a possible bid for United States Steel, offering insights into a potential alternative scenario post-deal dissolution.
The U.S. opposition to the acquisition has broader implications, potentially overshadowing an upcoming summit between Biden and Japanese Prime Minister Fumio Kishida aimed at strengthening bilateral security ties amid rising Chinese influence.
Biden’s outreach to United Steelworkers International President David McCall underscores his support for the steelworkers’ community and his commitment to protecting American interests in critical industries. McCall echoed concerns about national vulnerability in defense and infrastructure should U.S. Steel be acquired by a foreign entity.
As CFIUS continues discussions with the involved parties, the fate of the acquisition remains uncertain, with Nippon Steel facing challenges in securing approval amidst heightened scrutiny and political considerations in an election year.