According to reports, Biden is reportedly planning to prevent Nippon from acquiring control over US Steel.
According to reports, Biden is reportedly planning to prevent Nippon from acquiring control over US Steel.
The upcoming decision is anticipated, although it could influence future foreign investment in American corporations. Biden has consistently expressed opposition to the agreement, which was announced a year ago. Similarly, President-elect Trump has voiced his opposition to the deal and stated his intentions to obstruct it once in office.
This agreement has been a political powder keg since its unveiling in December 2023, sparking bipartisan criticism of foreign control over a once-vital US industrial sector struggling financially. Blocking the agreement could garner domestic support but could dissuade foreign investors from other US companies. Moreover, it could hinder US Steel's access to essential investments, as claimed by the company.
In late last month, the Committee on Foreign Investment in the United States (CFIUS) advised Biden that they failed to reach a consensus regarding US Steel's sale to Nippon and its potential threat to national security, leaving the final decision to Biden to make.
As a candidate in March, Biden stated in a statement, "We must preserve robust American steel companies backed by American steelworkers. I promised them my support, and I intend to keep my word. US Steel, an iconic American steel company with over a century of history, should remain domestically owned and operated."
The United Steelworkers Union has been resolute in their opposition to the deal since its announcement, expressing concerns about Nippon's assurances regarding protecting unionized jobs at certain mills with union members. However, Biden's opposition might not be the last word: Nippon and US Steel have committed to taking the matter to court in an attempt to secure approval for the deal, even if the Biden or incoming Trump administration seeks to block it.
US Steel and Nippon assert that the deal is vital for US Steel's domestic operations. US Steel maintains that it may be forced to close mills represented by the USW if it does not receive the $2.7 billion investment planned by Nippon Steel as part of its proposed $14.3 billion acquisition.
The proposed acquisition was destined to be controversial. US Steel once embodied American industrial dominance. It held the title of the world's most valuable company shortly after its formation in 1901 and was a significant contributor to the U.S. economy. It provided the raw materials for automobiles, appliances, bridges, and skyscrapers, symbolizing the country's strength.
However, the company has experienced a steady decline since its post-World War II peak. It is no longer even the largest U.S. steelmaker and employs only 14,000 people in the United States, with 11,000 being USW members. Nevertheless, politicians who champion American greatness are loath to see the corporation slip into foreign ownership, particularly in the politically vital state of Pennsylvania.
Trump's actions suggest political motivation in blocking Nippon's acquisition of US Steel, as he opposed the deal but recently welcomed a $100 billion investment from Softbank, Japan's Softbank, including funds for U.S. artificial intelligence technology – arguably a far greater concern for national security. If US Steel's purchase by a Japanese company poses a national security risk, potential investors might reconsider devoting resources to mergers and acquisitions or investments in American companies.
US Steel's shares (X) dropped by over 8% in pre-market trade on Friday.
CNN’s Anna Cooban contributed to this story.
This is a developing story and will be updated.
The upcoming decision regarding US Steel's sale to Nippon could greatly impact business investments in other American corporations, as foreign investors might be deterred if the deal is blocked. Biden's stance against the agreement, aimed at preserving domestic control over American steel companies, could potentially affect US Steel's access to essential investments.