President Joe Biden concluded a year-long economic drama that veered into electoral politics on Friday by announcing his decision to stop the Japanese corporation Nippon Steel from acquiring U.S. Steel for $15 billion.
Last month, a Treasury Department committee conducting a national security review was unable to agree on the agreement and postponed the president’s final decision. In September, NBC News claimed that Biden was getting ready to stop the coup.
The president, who is leaving office in little over two weeks, had to make a difficult political decision about the future of the venerable Pittsburgh-based company: Keeping U.S. Steel in American hands put the company’s existence in the face of fierce international competition at danger, but letting a foreign company with substantially more resources take it over may put it on a more stable financial foundation. However, a strong union of steelworkers rejected the transaction.
“As I have said many times, steel production and the steel workers who produce it are the backbone of our nation,” Biden stated in a press release. Resilient supply chains depend on a robust domestically owned and operated steel sector, which is a top national security priority. Our country is weaker and less secure without local steel manufacturing and domestic steel workers.
During the 2024 presidential campaign, President-Elect Donald Trump had also expressed his disapproval of the takeover plan. A request for comment Friday was not immediately answered by a Trump official.
The stock of U.S. Steel dropped over 6% on Friday.
U.S. Steel and Nippon Steel denounced Biden’s decision in a joint statement, claiming that it “reflects a clear violation of due process and the law.” The businesses also alluded to filing a lawsuit.
“Instead of abiding by the law, the process was manipulated to advance President Biden s political agenda,” claimed the statement. “It is evident that this was a political choice because the President’s statement and order offer no reliable proof of a national security concern. We are forced to take all necessary steps to safeguard our legal rights in the wake of President Biden’s decision.”
David Burritt, the CEO of U.S. Steel, blasted Biden in a statement later Friday, describing the president’s choice as “shameful and corrupt.”
“He jeopardized American competitiveness by insulting Japan, a crucial ally in both national security and the economy. Beijing’s leaders of the Chinese Communist Party are dancing in the streets. In the statement, he continued, “And Biden did all of this while refusing to even meet with us to learn the facts.” “We intend to fight President Biden s political corruption.”
Founded in 1901, the corporation employs about 11,000 people, but its workforce has decreased since its peak of about 340,000 during World War II. Since the 1990s, when cheaper steel manufacturing increased overseas, particularly in Asia, its share price has only marginally increased.
A U.S. Steel representative who was contacted for comment Thursday night cited an earlier statement in which they claimed that the agreement “enhances U.S. national and economic security through investment in manufacturing and innovation,” adding that it would “combat the competitive threat from China.”
“It is the best way, by far, to ensure that U. S. Steel, including its employees, communities, and customers, will thrive well into the future,” stated a spokeswoman. “It is our hope that President Biden will do the right thing and adhere to the law by approving a transaction that so clearly enhances U.S. national and economic security.”
A request for comment was not immediately answered by Nippon Steel, the biggest steel manufacturer in Japan.
The statement was welcomed by United Steelworkers, the union that represents a large number of the company’s workers.
We re grateful for President Biden s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers, the union said in a statement. We are certain that U.S. Steel will sustain strong national and economic security, decent jobs, and healthy communities for a very long time to come with appropriate management.
Pennsylvania Gov. Josh Shapiro issued a separate statement calling on U.S. Steel to continue to continue to prioritize protecting jobs in the western part of the state.
This matter is far from over, he said. We must find a long-term solution that protects the future of steelmaking in Western Pennsylvania and the workers who built U.S. Steel and built this country.
The potential blocking of the deal had raised concerns that it could harm U.S. relations with Japan, a key U.S. ally and the country s largest foreign investor.
There was no immediate comment from officials in Japan, where Friday was a bank holiday. Japanese government officials have previously declined to comment on matters concerning the management of individual companies but said it is essential for the U.S. and Japan to strengthen economic relations, including the expansion of mutual investment.
American and international business groups have also criticized what they say is the politicization of the deal.
The proposed acquisition drew controversy almost as soon as it was announced in December 2023, with Biden saying in astatementthat month that it appears to deserve serious scrutiny in terms of its potential impact on national security and supply chain reliability.
Biden and Vice President Kamala Harris, the Democratic presidential nominee, both campaigned against the proposed acquisition, saying U.S. Steel should remain American-owned.
Trump saidin December that hewould blockthe acquisitionand revive U.S. Steel through a combination of tax incentives and tariffs.
Nippon Steel tried to assuage politicians’ concerns, saying ina statement in Septemberthat U.S. Steel would remain an American company owned by Nippon Steel North America. Nippon Steel also said that Americans would make up the majority of the board of directors of U.S. Steel, and that the American company, under its new ownership, would stay headquartered in Pittsburgh.
“Nippon Steel will prioritize production at U. S. Steel to meet the demand in the U.S. steel market,” Nippon Steel said.
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