"For national security reasons," Biden blocked Japan's Nippon Steel from acquiring US Steel.

President Joe Biden officially blocked the proposed acquisition of the American company US Steel by the Japanese firm Nippon Steel for $14.9 billion on Friday. He cited national security concerns, as reported by “Voice of America.”

“A strong domestic steel industry is a critical national security priority and essential for resilient supply chains,” Biden stated. “Without domestic steel production and American steelworkers, our country will be weaker and less secure.”

The announcement regarding the deal was made in December 2023, and it faced immediate political opposition. Both Donald Trump and Joe Biden pledged to block the acquisition of the renowned American company, which was the first in history to reach a valuation of over $1 billion and once controlled a significant portion of steel production in the country.

In order to finalize the deal, Nippon paid a substantial amount and made several concessions to the U.S. government. The company warned that without the agreements, thousands of jobs would be at risk.

Nippon also proposed relocating its headquarters to Pittsburgh, where US Steel is located, and promised to adhere to all agreements made between US Steel and the USW union.

In a letter sent to Biden in November, Japanese Prime Minister Shigeru Ishiba urged the President to approve the merger of the two companies, but this did not lead to a favorable outcome.

White House National Security Advisor John Kirby stated that the decision to block the sale of U.S. Steel was made not to harm Japan, but to preserve steel production in the United States.

The President of the United Steelworkers union, David McCall, praised Biden's decision, expressing that he “has no doubt that this is the right move for our national security.”

Democrats in Congress also commended Biden's decision. Ohio Senator Sherrod Brown remarked that the deal “poses a clear threat to America’s national and economic security and our ability to enforce trade laws. That is why we fought against it at every turn.”

Background. For insights on the largest merger in the automotive industry in recent times, read Mind’s article “Honda merges with Nissan: Why Japanese auto giants are creating a ‘juggernaut’ company”.