The White House is reportedly nearing an announcement that President Joe Biden will block Nippon Steel’s acquisition of U.S. Steel due to national security concerns, according to two sources familiar with the situation. The $14.9 billion deal, which has faced increasing bipartisan opposition, could potentially be halted later this week.
U.S. Steel had previously warned that failing to finalize the deal with Japan-based Nippon could jeopardize thousands of union jobs in the U.S., with potential closures of steel mills and a possible relocation of its headquarters from Pennsylvania, a politically significant state.
Blocking the deal could strain U.S.-Japan relations, given Japan’s role as a close ally. The move is still under review by the Committee on Foreign Investment in the United States (CFIUS), which has not yet provided a formal recommendation to the president.
Both U.S. Steel and Nippon Steel maintain that the acquisition does not pose national security risks. In a statement, U.S. Steel emphasized Japan’s strong alliance with the U.S. and expressed intentions to explore all legal avenues to ensure the transaction is completed. Nippon Steel also expressed confidence that the U.S. government would handle the process lawfully.
The acquisition has drawn opposition from both political parties. Democratic Vice President Kamala Harris has called for U.S. Steel to remain “American owned and operated,” while Republican candidate Donald Trump has pledged to block the deal if he is elected. Both candidates are campaigning heavily in Pennsylvania, a crucial battleground state for the 2024 presidential election.
The White House has not yet commented on Biden’s decision but has reiterated his stance that American steel companies should be domestically owned. Meanwhile, U.S. Steel employees rallied outside the company’s headquarters, advocating for the benefits of the deal and warning of negative consequences if it falls through. CEO David Burritt has warned that without the deal, the company may shift away from blast furnace operations, threatening union jobs and possibly moving its headquarters out of Pittsburgh.
Nippon Steel, in an effort to address concerns, has promised a $2.7 billion investment in union-represented facilities in Pennsylvania and Indiana. U.S. Steel has indicated that it would not make similar financial commitments if the deal is blocked. The deal has already received regulatory approvals outside the U.S. and has the backing of U.S. Steel’s shareholders, but it remains under review domestically.
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