Biden officially blocks Japanese steel corporation from acquiring US Steel

On January 3, US President Joe Biden officially blocked the deal for Nippon Steel Corporation (Japan) to acquire US Steel Corporation (USA) for $14.9 billion, due to national security concerns.

US President Joe Biden at the White House in Washington DC, USA on January 2 - Photo: REUTERS

"This acquisition would place one of America's largest steelmakers under foreign control and pose a risk to our national security and critical supply chains. That is why I am taking action to block this deal," President Joe Biden said in a statement posted on the White House website on January 3.

"As I have said many times, steelmaking - and steelworkers - are the backbone of our nation. Without domestic steelmaking and domestic steelworkers, our nation would be less strong and less safe," the US leader pointed out.

In an executive order signed the same day, Mr. Biden cited the Defense Production Act of 1950, saying he believed Nippon Steel “might take action that threatens to undermine the national security of the United States.”

According to Reuters, Mr. Biden's decision dealt a fatal blow to the controversial acquisition proposal after a year of consideration.

The deal was announced in December 2023 and almost immediately faced opposition across the US political spectrum ahead of the US presidential election on November 5, 2024. Both Donald Trump and Biden have vowed to block the deal.

The acquisition was announced with the aim of creating the world's third-largest steelmaker, as Nippon Steel is currently the world's fourth-largest steelmaker, while US Steel is the 24th-largest. US Steel - headquartered in Pennsylvania - once controlled the majority of the country's steel production, but is now the country's third-largest steelmaker.

Nippon Steel Group headquarters in Tokyo, Japan - Photo: REUTERS

President Biden’s decision also cuts off a vital source of funding for U.S. Steel, the struggling American icon that has said it would have to close major plants without a nearly $3 billion investment from Japan.

Nippon Steel, meanwhile, argues that the acquisition of US Steel would help revitalize the US steel industry and benefit American workers. If the deal goes through, Nippon Steel would invest more than $2.7 billion, while ensuring that Americans would remain on US Steel’s board and management positions.

Nippon Steel has set a target of increasing its global production capacity to 85 million tonnes per year, from the current 65 million tonnes per year, towards a long-term target of 100 million tonnes per year.

However, both President Biden and President-elect Donald Trump have argued that US Steel should remain American-owned. Last November, Japanese Prime Minister Shigeru Ishiba urged Mr. Biden to approve the merger to avoid undermining recent efforts to strengthen bilateral ties.

What do Nippon Steel and US Steel say?

According to AFP, Mr. Biden's move has been met with harsh criticism from both US Steel and Nippon Steel. Meanwhile, the United Steelworkers union was quick to welcome Mr. Biden's decision.

"President Biden's statement and executive order do not provide any credible evidence of national security concerns, making it clear that this is a political decision," Nippon Steel and US Steel said in a joint statement.

The two companies said they would "take all appropriate action" to protect their legal rights.

Source: https://tuoitre.vn/ong-biden-chinh-thuc-chan-tap-doan-thep-nhat-ban-mua-lai-us-steel-20250104083907789.htm