President Joe Biden has rejected the nearly $15 billion proposed deal for Nippon Steel of Japan to purchase Pittsburgh, Pennsylvania-based U.S. Steel.
“We need major U.S. companies representing the major share of US steelmaking capacity,” President Biden wrote in a Friday morning statement. “This acquisition would place one of America’s largest steel producers under foreign control.”
His verdict comes after a federal committee failed to reach agreement on the possible national security risks of the deal. Last month, it sent a long-awaited report on the deal to President Biden. He had 15 days to reach a final decision.
Nippon Steel announced in December 2023 that it planned to buy the steel producer for $14.9 billion. It committed to keeping the U.S. Steel name and Pittsburgh headquarters. But some workers and lawmaker raised concerns about what the purchase could mean for unionized workers, supply chains, and U.S. national security.
The announcement came during a season of renewed support for rebuilding America’s manufacturing sector.
The United Steelworkers union has about 1.2 million members. They expressed concern about the sale. They claim it could cause job losses and harm contract terms.
A letter from union officials to members explained, “As a union, our primary concern is the future of our jobs and the communities we live and work in . . . We’ve seen job losses in the past, and we must do everything we can to avoid it in the future.”
“While Japan is a political ally, it is also an economic competitor,” the union says. “One that has proven time and again that it is willing to promote its steel industry at our expense.”
Union international president David McCall says the union is grateful for the block of the sale. He called it the “right move for our members and our national security.”
Nippon Steel argues it can help American steel compete. Chinese steelmakers dominate the industry. The Japanese company promised to invest billions in U.S. facilities.
Nippon Steel will try to boost sales in other regions. Masato Suzuki is a company official. “We can’t expect demand in Japan to grow as the population is declining,” he said in early December. “We need to invest in production that leads to growth.”
The company already has manufacturing operations in the United States, Mexico, China, and Southeast Asia. It supplies the world’s top automakers, including Toyota Motor Corporation. It also makes steel for railways, pipes, appliances, and skyscrapers.
