President Biden announced he is blocking the $14 billion takeover of U.S. Steel by Japan’s Nippon Steel, arguing the sale posed a national security threat.
In a statement released Friday morning, Biden argued the U.S. steel industry is the “backbone of our nation” and is a national security priority given its use in critical infrastructure, the auto industry, and the defense industrial base.
Noting the unfair trade practices U.S. steel companies face from foreign companies, Biden highlighted the actions he’s taken to “level the playing field for American steelworkers,” including imposing tariffs on China.
“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” he said.
The president’s decision to block the deal came after a federal committee reviewing the transaction opted to not make a formal recommendation about whether the takeover should be allowed to proceed, according to letters sent to the companies and the White House last month.
The Committee of Foreign Investment in the United States, which is made up of agencies including the departments of Treasury and Justice, expressed reservations about the deal to the companies in a letter last month. CFIUS (pronounced SIFF-ee-yuhs) voiced concerns that the transaction could pose a national security threat to the United States by potentially leading to a decline in American steel production. The officials suggested that Nippon’s other global business considerations could in the future outweigh its pledges to invest in U.S. Steel.
The lack of a formal recommendation cleared the way for Mr. Biden, barring an unexpected change of heart, to end a transaction that became ensnared in election-year politics. (NYT)
“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 that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company," Biden said. "U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.”
The decision was an extraordinary use of executive power, particularly for a president who is just weeks from leaving office. It is also a departure from America’s long-established culture of open investment, one that could have wide-ranging implications for the U.S. economy. [...]
Mr. Biden’s move to stop the transaction could cause foreign investors to rethink the wisdom of acquiring American firms in sensitive industries that are based in politically important states. It could also roil relations with Japan, a close ally of the United States and one of America’s largest sources of foreign investment. (NYT)
Biden argued, however, that his decision represents his “unflinching commitment to utilize all authorities available to me as President to defend U.S. national security….”
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