President Joe Biden has blocked Japan’s Nippon Steel from acquiring US Steel in a $15 billion deal, citing national security concerns. The decision has sparked backlash from both companies and raised questions about the future of US-Japan economic relations.
In a statement on Friday, Biden emphasized the importance of maintaining US control over key industries. “We need major US companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” he said.
The move aligns with a campaign promise Biden made to prioritize domestic industry, but it has drawn criticism from Japan. A Japanese government source told Euronews that Nippon Steel’s acquisition aimed to combine advanced technologies from both countries, bolstering competitiveness while preserving US steel production capacity and jobs.
The source added that the decision could undermine the growing trend of Japanese investment in the United States and expressed “strong concerns” about its impact on economic ties. “It is regrettable that this decision was made due to national security concerns,” the source said, urging the US to work with its partners to address such issues.
Corporate and Political Backlash
Nippon Steel and US Steel condemned the decision in a joint statement, accusing Biden of manipulating the process to serve political ends. “This represents a clear violation of due process and the law,” the companies said, adding that they are exploring legal action to protect their interests.
The statement dismissed Biden’s justification, claiming there was no credible evidence of national security risks. The companies warned that the decision “sends a chilling message” to allied nations considering significant investments in the US.
The controversy follows the Committee on Foreign Investment in the United States (CFIUS) failing to reach consensus on the deal last month. CFIUS submitted its report to Biden, who had 15 days to decide.
Impact on US-Japan Relations
The decision comes just weeks before Biden leaves office and may strain ties with Japan, a key US ally in Asia and its largest foreign holder of US debt. Critics argue that the move undermines trust in economic collaboration between the two nations.
The rejection has also drawn criticism from conservative lawmakers and business groups like the US Chamber of Commerce, which had supported the deal. Nippon Steel had garnered support from some Steelworkers union members and local leaders near its US operations.
Nippon Steel, the world’s fourth-largest steelmaker, sought the acquisition to enhance its global standing. US Steel, ranked 24th in 2023 by the World Steel Association, would have benefited from the partnership’s technological and operational synergies.
The fallout from Biden’s decision could have lasting implications for foreign investment and US industrial policy.
