Biden prevents Nippon Steel from buying US Steel

US President Joe Biden has officially blocked the takeover of US Steel by a major Japanese company, saying foreign ownership could pose a national security risk.

The controversial decision comes a year after Nippon Steel first announced the $14.9bn (£12bn) deal, calling it a lifeline for its smaller rival in Pennsylvania.

But the deal soon ran into political trouble after leaders of the United Steelworkers union vocally opposed the deal, stoking political pressure in a key state during the 2024 presidential election.

Biden decided to abandon the deal despite concerns from some advisers that it could damage Washington’s relationship with Tokyo, a key ally.

BBC News contacted Nippon Steel and US Steel for comment.

Nippon Steel previously denied it planned to cut production or cut jobs, while US Steel warned it may have to close plants without the investment that would come with a new owner.

This concern was echoed by some workers and local politicians.

Other business groups have said they fear scrapping the deal will chill the climate for international investment in the United States.

But Biden has long expressed opposition to the deal. The deal was also criticized by President-elect Donald Trump and incoming Vice President J.D. Vance.

A US government panel tasked with reviewing the deal for national security risks failed to reach a consensus by the end of December, leaving the decision to Biden, who had 15 days to act.

In a statement Friday, he said maintaining U.S. ownership is important to maintaining the strength of the U.S. steel industry and its supply chains.

“As I’ve said many times, steelmaking — and the steelmakers who make it — are the foundation of our nation,” he said.

“That’s because steel runs our country: our infrastructure, our automotive industry and our defense industrial base. Without domestic steel production and domestic steel workers, our country is less strong and less safe.”

Nippon Steel and US Steel have previously suggested they may take legal action against the government if the deal does not go through.

Professor Stephen Nagy of the Department of Political International Studies at the International Christian University in Tokyo said it was a “political” decision, noting that the Biden administration had promised a “middle-class foreign policy” from the start.

“This was a direct response to and continuation of Trump’s MAGA Make America Great Again agenda,” he said.

“The Biden administration could not appear weak to foreign business, whether it was an ally or an adversary.”