President Joe Biden has blocked the sale of U.S. Steel to Japan-based Nippon Steel, citing national security concerns. The move delivers on campaign promises made both by him and President-elect Donald Trump — but it has also drawn the threat of legal reprisal from the companies, and raised new questions about the long-term prospects for steelmaking in Western Pennsylvania.
"Steel production — and the steel workers who produce it — are the backbone of our nation," said Biden in a statement explaining the action . "A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure."
"It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry," the statement continued. "It is a fulfillment of that responsibility to block foreign ownership of this vital American company."
Issued by the White House early Friday morning, the order itself says, "The proposed acquisition of U.S. Steel by the Purchasers is prohibited, and any substantially similar transaction between the Purchasers and U.S. Steel ... is also prohibited." Barring action by the Committee on Foreign Investment in the United States, it said, "The Purchasers and U.S. Steel shall take all steps necessary to fully and permanently abandon the Proposed Transaction no later than 30 days after the date of this order."
The companies blasted Biden's move in a Friday-morning statement that promised legal action.
In a joint statement, the firms said they were "dismayed by President Biden's decision ... which reflects a clear violation of due process and the law.
"[T]he process was manipulated to advance President Biden’s political agenda," the statement asserted. "The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights."
The statement said the companies had pledged $1 billion in investment to the Mon Valley operations and sought to proactively address a range of concerns about the future. It said it was " shocking — and deeply troubling — that the U.S. government would reject a procompetitive transaction that advances U.S. interests and treat an ally like Japan in this way. Unfortunately, it sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States."
CFIUS, which had been reviewing the proposed sale, failed to reach consensus on the possible risks of a deal in December, leaving the decision to Biden. Still, in a press conference Friday afternoon, Biden spokesperson Karine Jean-Pierre cited CFIUS as the basis for the move. "We let this process play out," she told reporters. "CFIUS made a determination and they said this acquisition would create risk for our national security and our critical supply chain, and the president took that really very seriously."
Jean-Pierre also dismissed the companies' concerns about the move's potential impact on trade and foreign relations. "This is not about Japan. It's not," she said. "This is about making sure that we are strong domestically ... for our national security and for a resilient supply chain."
She said Biden had spoken to the Japanaese directly about the move.
Biden's move comes as little surprise: Reports from the Washington Post and the The New York Times Thursday evening said he had decided to oppose the sale, perhaps by Friday. And with the backing of the United Steelworkers union, he's long made his opposition to the deal clear. At a visit to the union's international headquarters Downtown last spring, Biden said the firm "should remain an American company. That's going to happen, I promise you."
Trump has also opposed the acquisition and vowed early last month on his Truth Social platform to “block this deal from happening. BUYER BEWARE!"
The Steelworkers hailed Biden's action, calling it "the right move for our members and our national security." Permitting the sale, the union said, "would have offered [Nippon] the opportunity to further destabilize our trade system [and] compromise our ability to meet our own national security and critical infrastructure needs."
And in a Friday afternoon press call, Steelworkers President David McCall shrugged off the threats of legal action. "I guess anybody can sue anybody in this country anytime they want," he said. "But the president and CFIUS have taken a considerable amount of time going through this."
But at a time when the future of American manufacturing has been hotly contested, debate over the sale has created unusual bipartisan coalitions on both sides. In addition to the two major-party presidential candidates, the sale was also opposed by both U.S. Sen. Bob Casey and the man who beat him in last year's election, Republican Dave McCormick. Democratic Sen. John Fetterman and Congressman Chris Deluzio also opposed the transaction.
Deluzio celebrated Biden's move Friday, and said Nippon only promised to protect workers and facilities because of pressure from unions and political leaders like him. He said US Steel's own behavior prompted those efforts.
"I've seen this company for a long time shift money, shift investment, shift capacity out of our region," he told WESA. "That's been their business plan."
But while Steelworkers union leaders opposed the sale, some rank-and-file workers, and local political figures in both parties, have been supportive, arguing that it represented the best chance for the long-term survival of the company. Nippon had pledged to make substantial investments and upgrades to the Mon Valley Works, an integrated network of facilities in Braddock, West Mifflin, and Clairton. And while the Steelworkers supported a rival bid by unionized steelmaker Cleveland Cliffs, some analysts said a Nippon purchase offered better long-term prospects for the company.
Among those disappointed by Biden's move was North Braddock Mayor Cletus Lee, who has called for President-elect Donald Trump to visit the Mon Valley to see the impact of opposing the deal. Lee still hopes Trump could change his mind and revive the sale.
"This is what he's all about, the art of the deal," Lee said, referring to the title of Trump's 1987 business book. "So this is this is a perfect time for him to do the things necessary to make America great again."
Under the terms of the proposed $14.9 billion all-cash deal, U.S. Steel would keep its name and its headquarters in Pittsburgh, where it was founded in 1901 by J.P. Morgan and Andrew Carnegie. It would become a subsidiary of Nippon Steel, and the combined company would be among the top three steelmakers in the world, according to 2023 figures from the World Steel Association.
Nippon has been seeking to sweeten the deal in recent weeks, pledging not to reduce domestic steel production for at least 10 years, and — as recently as Thursday — to create a workforce training center in the Pittsburgh area.
Conversely, the firms have warned that if the sale doesn't go through, the consequences might be felt by the workers whose jobs opponents hope to protect.
"Without the Nippon Steel transaction, U. S. Steel will largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities," U.S. Steel warned in September. "The lack of a deal with Nippon Steel raises serious questions about U. S. Steel remaining headquartered in Pittsburgh."
Gov. Josh Shapiro, who has stressed the importance of protecting jobs without taking a public position for or against the sale, issued a Friday-morning statement addressing such threats. "I expect U.S. Steel to uphold their commitments to western Pennsylvania, [and] refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ," he said.
He also urged that "any other potential buyers ... demonstrate the strong commitments to capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table."
Clairton Coke Works employee Don Furko seemed undaunted by U.S. Steel's threats.
Furko, who has worked at the facility for 24 years and once led its union local, thinks more workers oppose the deal than is publicly believed. Many workers feared the company would retaliate if they said so, he said.
Furko doesn't think that the Mon Valley facilities are in jeopardy of closing anytime soon. And he says if there is a risk, U.S. Steel should partner with workers to address it.
"This is a symbiotic relationship, the union and the company," Furko said. "We need jobs, the company needs workers."
This story is developing and will be updated.
