U.S. Steel, Nippon say Biden's decision to block sale was 'political'

President Joe Biden on Friday blocked a nearly $15 billion sale of Pittsburgh-based U.S. Steel to Japan’s Nippon Steel Corp., throwing the local future of the country’s once-dominant steelmaker into question.

In a move signaled months ago, Biden cited national security concerns surrounding the deal despite pledges from Nippon to keep the company’s Downtown headquarters and allow U.S. government approval of its staffing levels.

Biden’s move was supported by the United Steelworkers national union, but some rank-and-file employees of U.S. Steel’s operations at its Mon Valley Works in Braddock, Clairton and West Mifflin supported the sale, which U.S. Steel said was a path for the company to modernize its aging plants and maintain its production.

Mon Valley can produce nearly 3 million tons of raw steel annually, the company says on its website.

Nippon is the fourth-largest steelmaker in the world and produced more than 43 million tons in 2023. U.S. Steel is the 24th-largest producer at about 15 million tons in 2023, according to the World Steel Association.

‘Credible’ Defense Production Act concerns cited

Biden invoked his right to deny mergers and acquisitions under the Defense Production Act over what he called credible evidence that Nippon might act in ways that impair national security.

It wasn’t a surprise.

The decision went to the president after the Treasury-led Committee on Foreign Investment in the United States’ split decision Dec. 23.

In a statement from the White House, Biden criticized foreign steel companies for dumping steel on global markets at artificially deflated prices, harming the domestic manufacturers. He also claimed steel represents an essential national security priority and is critical for resilient supply chains, echoing many of the deal’s opponents.

In a joint statement, the companies dismissed the decision as politically manipulated, with no real evidence of a national security issue.

“We are left with no choice but to take all appropriate action to protect our legal rights,” the companies said.

Biden’s order gives the companies 30 days to abandon the transaction, barring an extension from the Committee on Foreign Investment in the United States.

Politicians lined up to comment on the proposed sale, but few besides local mayors have criticized Biden directly.

“This matter is far from over — 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,” Pennsylvania Gov. Josh Shapiro said in a statement Friday. “I expect U.S. Steel to uphold their commitments … refrain from threatening the jobs and livelihoods of the Pennsylvanians who work at the Mon Valley Works and at U.S. Steel HQ and their families.”

The impact of the decision will hit home for Lt. Gov. Austin Davis, he said in a statement.

“I know the pain and frustration of my neighbors who watched as the steel industry collapsed, laying off thousands of workers and shuttering factories, while leaders in Washington did nothing. I’m deeply concerned this is happening again — and that is unacceptable,” said Davis, a McKeesport native.

Added Davis: “Now that President Biden has blocked this deal, we need to find a long-term plan for keeping steel production in the Mon Valley and protecting Pennsylvania workers’ livelihoods. No more statements and fired-off social media posts — the workers and their families need to hear a plan.”

Allegheny County Executive Sara Innamorato stressed the importance of maintaining steel operations in the Mon Valley.

“Ultimately, this is a federal decision, but regardless of if operations are owned by U.S. Steel or another entity, we are committed to working collaboratively with all partners to make sure the Mon Valley is invested in and has the resources it needs,” she said.

Related:

• With U.S. Steel deal axed, economic experts question future of Mon Valley steelmaking
• What they're saying about it: U.S. Steel-Nippon deal blocked
• Read Biden's statement about decision to block sale of U.S. Steel
• Read Nippon Steel's statement about Biden's decision to block sale of U.S. Steel

Nippon seemingly pulled out all the stops in recent weeks to assuage national security fears and win over United Steelworkers International President David McCall, who has been critical of the transaction since it was announced in December 2023, even as rank-and-file steelworkers have warmed to the takeover.

McCall told TribLive in November that he was unfazed by those defections, including by some local union heads.

The union released a statement welcoming Biden’s move and calling Nippon a serial trade cheater.

“Allowing it to purchase U.S. Steel would have offered it the opportunity to further destabilize our trade system from within and in the process, compromise our ability to meet our own national security and critical infrastructure needs,” the union said.

On Dec. 10, Japan’s largest steelmaker promised $5,000 payouts to eligible employees if the deal closed, deepening its prospective investment on top of $2.7 billion in pledged plant upgrades.

At least $1 billion was set aside for the West Mifflin hot strip mill, one of four facilities that make up U.S. Steel’s manufacturing presence in Western Pennsylvania. The company is headquartered in Downtown Pittsburgh.

U.S. Steel CEO David Burritt has said the company may pull up stakes in the Mon Valley without a buyer.

A source familiar with Nippon’s dealings confirmed to TribLive that the company offered the federal government veto power over any reductions in production capacity at U.S. Steel plants in six states, including Pennsylvania, and had promised to appoint American citizens to board and top management positions post-merger.

U.S. Sen. John Fetterman and U.S. Rep. Chris Deluzio took some credit for those concessions.

In an interview with TribLive on Thursday, Fetterman said he’ll oppose the sale as long as the union does. Deluzio has taken a more conciliatory tone as of late without outright supporting the deal, including in a statement issued Friday morning.

“From the beginning, the workers who power this company should have had a seat at the negotiating table — their livelihoods hung in the balance,” Deluzio said.

The union has claimed they were not given notice of the sale before it went public.

Like Biden, President-elect Donald Trump has long vowed to reject a foreign buyer for U.S. Steel.

Yet, Japan is one of America’s closest allies, making Biden’s call potentially damaging to relations between the countries.