U.S President Joe Biden has rejected the acquisition of US Steel by a larger Japanese company, fulfilling a campaign promise despite concerns that the action would harm Washington’s relations with Tokyo and deter other foreign investors.
Biden highlighted national security concerns in rejecting the Nippon Steel acquisition, claiming that US ownership was critical to the health of the steel industry and its supply lines.
He intervened following pressure from the United Steelworkers union, which had rejected a deal that was a contentious political issue during the US presidential campaign of 2024.
Biden’s decision, according to Nippon Steel and US Steel, demonstrated that the transaction review process had been “corrupted” for political purposes.
The two businesses warned Friday they would take “appropriate action to protect their legal rights,” after earlier threatening to sue the government if the merger did not go through.
Biden’s decision comes a year after Nippon Steel first announced the $14.9bn (£12bn) deal to buy its smaller Pennsylvania-based rival.
US Steel has warned that it might have to close factories without the investment that would come with a new owner, concerns that had been echoed by some workers and local politicians.
The two companies had pledged not to cut jobs and made other concessions in an effort to win support for the deal. Just this week, they offered to fund a workforce training centre – and reportedly give the government the right to veto potential production cuts.
Biden was given a 15-day window to make a decision after the US government group tasked with assessing the deal for national security threats was unable to come to an agreement by the end of December.
He stated that foreign ownership posed a concern in his announcement on Friday.
The United Steelworkers union said that its opposition was motivated by worries about the long-term sustainability of its industry and referred to the decision as the “right move for our members and our national security.”
