President Joe Biden announced his opposition to the pending $14.1 billion purchase of United States Steel by Japanese steelmaker Nippon Steel that was announced late last year.
Biden released a statement on Thursday calling for U.S. Steel to remain a domestically owned and operated company.
“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said. “I told our steel workers I have their backs, and I meant it. U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.”
The president’s words echo what national economic adviser Lael Brainard said in December when the pending sale of U.S. Steel to Nippon Steel was announced. Brainard indicated that the acquisition would be heavily scrutinized by the Biden administration because of its potential implications for national security and supply chains.
A bipartisan group of senators announced their opposition to the U.S. Steel acquisition in December and wrote a letter to Treasury Secretary Janet Yellen urging her to block the sale for national-security reasons. American firm Cleveland-Cliffs was the top domestic bidder for U.S. Steel, offering $35 per share to buy the company, significantly less than the $55 per share offer by Nippon Steel.
The United Steel Workers, a supporter of the Cleveland-Cliffs proposal and a powerful Pittsburgh-based labor union, celebrated Biden’s call for U.S. Steel to remain domestically owned.
“President Biden told USW members he has our backs, and there’s no question that he meant it. We’re grateful for his unfailing support and his ongoing commitment to advancing the interests of working families and their communities,” the union said. USW is a strong supporter of Biden’s domestic agenda, including the steel tariffs imposed by the Biden administration, a continuation of the Trump administration’s trade policy toward manufacturing.
Support from blue-collar workers in Pennsylvania will likely play a crucial role in whether Biden wins the swing state in November against former president Donald Trump, who has also pledged to block the deal.
Nippon Steel is defending its planned purchase of U.S. Steel in response to President Biden’s statement by pointing to the benefits it will provide to American workers and national security. The company promises to invest in American steelmaking and to protect union jobs if the deal goes through.
The Biden administration is reportedly hoping that Rahm Emanuel, U.S. ambassador to Japan, will make the deal go away after Emanuel initially voiced his support for the acquisition. Nippon Steel filed its proposal with the Committee on Foreign Investment in the U.S. last week, and the national-security review is pending, the Financial Times reported. Japan is one of the longest and most trusted allies of the U.S., particularly in strategic competition against China.
Shares of U.S. Steel dropped ahead of Biden’s expected announcement and continued to slide once he officially came out against the acquisition. U.S. Steel once was an iconic American industrial giant, but its market share in global steel production has steadily declined as employment in the industry has dropped off over the past few decades.