United States President Joe Biden prevents the transaction of American steel businesses to Japanese entities
Updated Article:
Joe Biden pulled a last-minute move, squashing the planned acquisition of US Steel by Nippon Steel just days before vacating the Oval Office. The President expressed concerns about national security and risks to critical supply chains as the reasons behind his decision.
Biden underscored that a significant American steel player falling under foreign control could create potential hazards. Emphasizing the importance of a robust, domestically-led steel industry, he declared that US Steel will remain a stalwart American company.
The steel giants first unveiled their merger plan back in December '23, setting the total deal value—incorporating assumed debt—at approximately $14.9 billion (approximately €14.5 billion in current exchange rates).
US labor unions vehemently opposed the takeover, dreading potential job losses and articulating their concerns to Biden, a crucial voting bloc during his re-election campaign.
Biden had earlier voiced concerns, but waited till the last minute before making his formal decision, timed to hand over the presidency to Donald Trump on the 20th of January.
Trump also echoed his intention to halt the deal, should he be sworn in. Despite the agreement gaining approval from shareholders and the boards of both companies, this executive order blocked the transaction.
Noteworthy, this marks the first instance of a US President halted a Japanese investment within American borders [1][3]. The concerns pertaining to national security, supply chain risks, and broader political implications—given the criticism from US lawmakers and the US Steelworkers union—may have significantly influenced Biden's stance [3][4]. While Japan remains a close ally, the economic benefits from the deal failed to outweigh the anxieties raised.
- The President Biden, in his final days in office, prevented the acquisition of US Steel by Nippon Steel, citing national security risks and potential dangers to critical supply chains as his reasoning.
- Biden emphasized the importance of a strong, domestically-led steel industry and ensured that US Steel would continue to be a prominent American company.
- The proposed merger between these steel giants was initially announced in December 2023, with an estimated deal value of approximately $14.9 billion (€14.5 billion).
- US labor unions were vehemently opposed to the takeover, fearing potential job losses and expressing their concerns to Biden, a key voting bloc during his re-election campaign.
- This move by Biden marked the first instance of a US President halting a Japanese investment within American borders, as concerns over national security, supply chain risks, and broader political implications weighed heavily on his decision.
