Biden blocks US Steel’s $14 billion sale to Japanese giant Nippon Steel

President Joe Biden on Friday blocked US Steel’s (X) $14 billion sale to Japanese giant Nippon Steel on national security concerns, creating new uncertainty for an iconic American steelmaker.

“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,” President Biden said in a statement.

The stock of Pittsburgh-based US Steel dropped more than 7% in morning trading.

US Steel and Nippon in a joint statement suggested they would now pursue legal action following Biden’s order, which they said did not “present any credible evidence of a national security issue, making it clear this was a political decision.”

“We are left with no choice but to take all appropriate action to protect our legal rights,” the companies said in their statement, which argued that Biden’s move sent “a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States.”

The 124-year-old US Steel spent much of 2024 lobbying the Biden administration to approve the tie-up, which would have allowed the world’s fourth-largest steelmaker an entry into the US market.

The Japanese buyer committed to keep the US Steel name and Pittsburgh headquarters, but it couldn’t overcome concerns about the potential effect on union workers, domestic supply chains, and US national security.

The United Steelworkers union staunchly opposed the deal, arguing it would be bad for steelworkers and harm America’s ability to produce steel.

Biden sided with that view in the latest example of a protectionist tilt in Washington from both parties.

“We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said Friday.

Biden was public about his opposition to the deal last year while he was still running for president. President-elect Donald Trump also opposed the acquisition and also vowed to block the deal.

The Committee on Foreign Investment in the United States (CFIUS), a federal interagency panel, spent months reviewing the acquisition for national security risks and was reportedly unable to reach a consensus before sending a report about the matter to Biden.

In his new executive order issued Friday, Biden is requiring the companies to abandon the deal in 30 days unless the date is extended by CFIUS.

It’s unclear if US Steel would look to find a new buyer.

“It’s been a highly politicized process,” Josh Spoores, CRU North American steel analyst, told Yahoo Finance.

Story Continues