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President Joe Biden on Friday invoked a rarely-used presidential power to prevent the Japanesesteel giant Nippon Steel from purchasing the United States Steel Corporation, citing the $14.1 billion deal’s potential consequences to American national security after a year-long review process.
The long-awaited decision to prohibit the transition, which would have placed America’s largest steel-making enterprise under foreign control, blocks Nippon Steel and its’ American affiliates from any attempt to acquire control of the Pittsburgh-based U.S. Steel.
It comes after a inter-agency committee charged with reviewing overseas business acquisitions of American businesses and other transactions with national security implications failed to reach a decision on whether to recommend approval or prohibition of the merger. The review had been ongoing since the deal was first announced last December, though both Biden and President-elect Donald Trump had each pledged to keep the deal from going through.
In a statement, Biden cited the need to keep steel production, which he described as “the backbone of our nation,” fully in American hands because it “represents an essential national security priority and is critical for resilient supply chains.”
“That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure,” said Biden, who has long championed the need to protect American workers, particularly the unionized ones who are employed by U.S. Steel and other U.S. based steelmakers.
Biden also noted that U.S. Steel and its’ American competitors have long had to deal with unfair trade practices including Chinese dumping of cheap foreign steel into the U.S. market at prices that are unfairly low in order to undermine domestic manufacturing. He recalled how he’d tripled tariffs on imported steel first imposed during Donald Trump’s first term and said that “decisive action” had helped American steelmakers to open more than 100 new steel and iron mills over his own four-year term.
“We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said, adding later that the inter-agency committee — known as CFIUS — had found that the proposed takeover of U.S. Steel by Nippon Steel could “create risk for our national security and our critical supply chains.”
Continuing, he said it had been his “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.”
“It is a fulfillment of that responsibility to block foreign ownership of this vital American company. 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,” he added.
