Biden blocks Nippon Steel from buying US Steel

US President Joe Biden has officially blocked a takeover of US Steel by a major Japanese company, saying foreign ownership could pose a national security risk.

The controversial decision comes a year after Nippon Steel first announced a $14.9bn (£12bn) deal, describing it as a bailout of its smaller Pennsylvania rival.

But the deal soon ran into political trouble, after leaders of the United Steelworkers union opposed the deal, leading to political pressure to take action in the 2024 presidential election.

Biden decided to abandon the deal despite some advisers worried it could damage Washington’s relationship with Tokyo, its biggest ally.

BBC News has contacted Nippon Steel and US Steel for comment.

Nippon Steel has previously denied plans to cut production or cut jobs, while US Steel warned it would have to close plants without the money a new owner would bring.

These concerns were echoed by other workers and politicians in the area.

Some business groups have said they fear rejecting the sale could damage the global economic climate in the US.

But Biden has long voiced opposition to the deal. The project was also opposed by President-elect Donald Trump and his vice president, JD Vance.

The US government charged with reviewing the threat to national security has failed to reach the end of December, leaving the decision to Biden, who had to act within 15 days.

In his announcement on Friday he said that maintaining US ownership was necessary for the US steel industry to remain strong and provide strong chains.

“As I’ve said many times, steelmaking — and the steelworkers who make it — is the foundation of our country,” he said.

“This is because steel powers our country: our infrastructure, our industries, our industries and our defense. Without domestic steel production and domestic workers, our country is not strong and very safe.”

Nippon Steel and US Steel have previously said they may take legal action against the government if the deal does not go through.

Prof Stephen Nagy, from the Department of Politics International Studies at the International Christian University in Tokyo, said this was a “political” decision, saying that the Biden administration from the beginning promised “a foreign policy for the middle class”.

“This was a direct response and continuation of Trump’s MAGA plan for Making America Great Again,” he said.

“The Biden administration can’t be seen as weak in foreign business, whether it’s a partner or an adversary.”