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In a recent development, President Joe Biden has put a halt to a $15 billion acquisition plan by Japan’s Nippon Steel to purchase US Steel, marking a potential strain in relations with America’s key Asia-Pacific ally. Biden, who has consistently been against the acquisition, issued a directive last Friday ordering both companies to “completely and permanently abandon the proposed transaction” within the next 30 days.
This decision comes just 17 days before Biden is set to hand over the presidency to Donald Trump, who also disapproves of the deal. The president argued there is “credible evidence” suggesting that through this acquisition, Nippon Steel might engage in actions that could compromise U.S. national security.
The widespread bipartisan resistance to the deal underscores a significant shift in U.S. political attitudes towards foreign investments, especially in critical industries where labor unions hold substantial sway. This announcement followed the Committee on Foreign Investment’s inability to reach a decision by the December 23 deadline on whether the buyout posed a national security concern.
Biden’s decisive action represents a setback for Nippon Steel’s bold expansion plans, which unfortunately turned into a contentious topic during an election year in the U.S. The powerful opposition from the United Steelworkers union was a significant blow to the deal, despite the vigorous lobbying efforts by executives from both Nippon Steel and US Steel in recent weeks.
Following the announcement, US Steel’s stock dropped nearly 8 percent in pre-market trading on Friday. Critics of the takeover celebrated Biden’s intervention. Outgoing Democratic Senator Sherrod Brown from Ohio voiced his support, stating, “This deal was crafted behind closed doors without worker input. It posed a clear threat to America’s national and economic security, hampering our ability to enforce trade laws. We’ve opposed it every step of the way, and the President’s decision to block it is justified.”
