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President Joe Biden is expected to block a $15 billion deal by Japan’s Nippon Steel to buy U.S. steel, ending months of frantic lobbying and dealing a blow to Washington’s relationship with its closest Asia-Pacific ally.
In one of his final moves in government, Biden — long opposed to acquisitions — is expected to announce his decision to kill the proposed acquisition of the iconic American steelmaker as soon as Friday, two people familiar with the matter said.
One of those people said the White House had not yet been notified Nippon Steel about the decision.
The president’s expected move comes after an interagency investment screening review, known as the Committee on Foreign Investment in the United States (Cfius). Failed to reach consensus by a Dec. 23 deadline on whether the acquisition poses a threat to national security.
Nippon Steel may take legal action against the outgoing president’s ruling, two people close to the situation said.
One person said such a move, during the discovery process, could reveal how much the decision was driven by politics rather than national security concerns. The process will also reveal the limitations of the Cfius process and its vulnerability to political interests.
Nippon Steel declined to comment.
There was also President-elect Donald Trump threatened to cancel It has pledged to protect the Pittsburgh-based company through a mix of contracts and tariffs and tax incentives.
The conclusion of the year-long saga marks the failure of a daring gambit by the Japanese group that soon followed has become a sensitive political issue In an election year. This represents a significant departure from the long-standing open investment environment in the United States.
Biden’s decision risks undermining four years of work to reassure allies like Japan of their special relationship with the United States amid strategic competition with China and protectionism, support for trade unions and a shift toward an “America First” attitude in US politics.
U.S. and Japanese government officials fear broader implications for investment and M&A by Japan and other U.S. partners and the strengthening of the U.S.-Japan alliance.
Takahiro Mori, Nippon Steel’s vice-president, led a last-ditch effort by the Japanese steelmaker to win over government officials and union members in Washington and Pennsylvania.
Those efforts include a new proposal this week that offered the government a veto on cutting steelmaking capacity at most of Nippon Steel’s plants in the United States, adding an array of other assurances on jobs and investment.
The gesture follows concerns from Cfius that US Steel could reduce domestic steel production under Japanese ownership, affecting industries of national importance.
However, these moves were rarely effective, even as some of Biden’s senior advisers tried to talk him into blocking the deal.
Its passing marked a victory for U.S. Trade Representative Catherine Tay and United Steelworkers union president David McCall, two staunch opponents of the deal.
