White House signals likely to halt Nippon Steel’s plans to buy US Steel

Democratic presidential candidate Vice President Kamala Harris campaigns with President Joe Biden at the IBEW Local Union #5 headquarters in Pittsburgh on Labor Day, Monday, Sept. 2, 2024. (Jacquelyn Martin/AP)

WASHINGTON — The White House is signaling its willingness to block Nippon Steel’s takeover of U.S. Steel as the government’s review of the proposed acquisition by the Japanese company nears its conclusion.

The Washington Post reported Wednesday that President Joe Biden plans to halt the deal. A White House official, who insisted on anonymity to discuss the matter, did not deny the report and said Biden still needs to receive an official recommendation from the Committee on Foreign Investment in the United States. That review could be completed as early as this month.

Biden has already voiced opposition to the merger, backing his supporters in the United Steelworkers union who oppose the deal. The opposition matters because U.S. Steel is headquartered in the swing state of Pennsylvania and is a symbol of Pittsburgh’s industrial power in an election year in which both Republicans and Democrats are promising more jobs in the nation’s manufacturing industry.

Vice President Kamala Harris, the Democratic nominee, opposed the deal this week. Former President Donald Trump, the Republican nominee, has said he would block the merger if he were still in the White House.

US Steel shares fell about 17% after Biden announced his decision to halt the merger.

The CFIUS review process typically concerns business matters that impact national security. U.S. Steel spokeswoman Amanda Malkowski said in an email that the company had not received any updates on the process and that the company did not see “any national security issues associated with this transaction as Japan is one of our staunchest allies.”

“We expect to pursue all available legal options to ensure that we complete this transaction, which represents the best future for Pennsylvania, the American steel industry and all of our stakeholders,” Malkowski said.

The company held a rally Wednesday in support of the takeover. In a statement, it said that without a deal with Nippon Steel, the company “will largely move away from its blast furnace operations, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities where its facilities are located, and depriving the U.S. steel industry of the ability to better compete internationally.”

Nippon Steel announced the deal in December 2023, and US Steel shareholders approved it in April this year.

Levy reported from Harrisburg, Pennsylvania.