Unlock the White House Watch newsletter for free
A guide to what the 2024 US election means for Washington and the world
U.S. President Joe Biden is expected to block Japan’s Nippon Steel Co.’s $15 billion takeover of U.S. Steel Corp., ending months of frantic lobbying and causing a setback for Washington’s ties with its closest Asia-Pacific allies.
Biden, a longtime opponent of takeovers, is expected to announce his decision on Friday to end a proposed takeover of the iconic U.S. steelmaker in one of his final acts in the administration, according to two people familiar with the matter.
The White House has not notified Nippon Steel of the decision, one of the people said.
The president’s move came after an interagency investment screening review by the Committee on Foreign Investment in the United States (Cfius) failed to reach consensus on whether the acquisition posed a national security threat by a Dec. 23 deadline.
Nippon Steel may take legal action against the outgoing president’s ruling, two people familiar with the matter said.
During the discovery process, such an action could reveal the extent to which the decision was driven by political rather than national security concerns, one person said. The program will also expose the limitations of the Cfius program and its vulnerability to political interests.
Nippon Steel declined to comment.
President-elect Trump has also threatened to undo the deal and vowed to protect the Pittsburgh-based company with tariffs and tax incentives.
The end of the year-long saga marked the failure of the Japanese organization’s bold strategy and quickly turned into a sensitive political issue in an election year. It also represents a major departure from the long-term open investment environment in the United States.
Against a backdrop of strategic competition with China and a shift in U.S. politics towards protectionism, pro-union and “America First” sentiment, Biden’s decision could undercut four years of efforts to reassure allies such as Japan of their special relationship with the United States.
U.S. and Japanese government officials worry about the broader impact of investments and acquisitions by Japan and other U.S. partners and the impact on the strength of the U.S.-Japan alliance.
Nippon Steel Vice President Takahiro Mori led a last-ditch effort to win over government officials and union members in Washington and Pennsylvania.
Those efforts include a new proposal this week that would give the government veto power over Nippon Steel’s cuts in steel capacity at most of its U.S. plants, adding to a raft of other guarantees on jobs and investment.
Previously, the Committee on Foreign Investment in the United States was concerned that U.S. Steel could reduce domestic steel production under Japanese ownership, affecting important national industries.
Those moves had little effect, however, even as some of Biden’s top advisers tried to persuade him not to block the deal.
Its defeat marked a victory for U.S. Trade Representative Katherine Tai and United Steelworkers President David McCaul, two of the deal’s staunchest opponents.
