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US Steel Nippon Deal: Biden Cites National Security!

The recent news of the US Steel Nippon deal has taken everyone aback, as nobody was expecting such a huge turn of events. However, there are a lot of reasons behind the Nippon US steel deal, and this is why this decision regarding the steel industries has been taken properly.

Therefore, to know all about the US Steel Nippon deal, get to know all about these industries in detail. Plus, along with it, get into knowing why the United States or the US steel takeover has suddenly been stopped by Joe Biden. This will let you know about the US steel tower deal in more detail.

Article Overview

What Is the Recent News About the US Steel Nippon Deal?

About the recent US Steel Nippon deal, President Joe Biden on Friday officially blocked the takeover of U.S. Steel. This has been done by Japan’s Nippon Steel. This, on a large scale, went on to make good on Biden’s promise to keep an industrial name that is known to be more than a century old under domestic ownership.

Furthermore, Biden said that the proposed $14.9 billion acquisition by Nippon would place one of the largest steel producers in the U.S. under foreign control. This would, therefore, go forward, thus creating a risk for the nation’s critical supply chains.

“Today’s action reflects my unflinching commitment to utilizing all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security,” Biden said in a statement.

What More Has Been Said – US Steel Nippon Deal?

Furthermore, U.S. Steel’s stock fell off to be more than 6%. This was after the president’s announcement which states that Biden’s action comes after the Committee on Foreign Investment in the United States reviewed the deal for months. Along with that, U.S. Steel and Nippon issued a joint statement Friday expressing their dismay at Biden’s decision.

It even went on to accuse the White House of manipulating the review process to advance the president’s political agenda. The companies vowed to take “all appropriate action” to protect their rights. The United Steelworkers union fiercely opposed Nippon’s takeover from the day it was announced in December 2023. Biden signaled as early as March 2024 that he intended to block the sale, backing the United Steelworkers’ opposition to the deal.

Has Biden’s Decision Been Praised?

The United Steelworkers International President David McCall. However, has praised Biden’s decision in a statement on Friday. The union boss further attacked Nippon as a “serial trade cheater that for decades worked to undermine our domestic industry by dumping its products into our market.”

“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,” McCall said.

Biden’s decision to torpedo the deal underscores a bipartisan swing toward protectionism in the U.S., as Democrats and Republicans seek to maintain domestic control over key industries as geopolitical tensions escalate worldwide.

Who Else Has Opposed the Deal?

The President-elect Donald Trump has opposed the US Steel Nippon deal. This is because Biden’s decision to block the sale shows that even staunch allies like Japan are not immune to the swelling protectionist tide. On top of that, Tokyo is central to Washington’s efforts to keep China’s ambitions in the Indo-Pacific region in check.

What Has US Steel and Nippon Said About the Deal?

The U.S. Steel and Nippon have said that the US Steel Nippon deal is the best way to keep the company competitive, thus revitalizing communities in the American rust belt thus strengthening the national security. Also, U.S. Steel CEO David Burritt had previously warned that the company will likely close plants if the deal falls apart.

What Is Coming Up Next for US Steel Now – US Steel Nippon Deal?

The Pittsburgh-based U.S. Steel has recently warned that mills could close and thousands of jobs would be at risk without the deal. Plus, the U.S. Steel’s profits have dropped for nine straight quarters amid a global industry downturn. However, it still sports a forward price-to-earnings ratio of 12.87. This has been recorded to be more expensive than the U.S. peers, according to the LSEG data.

The United Steelworkers union, which opposed the deal, has called the company’s warnings baseless. On Friday, it said that U.S. Steel’s recent financial performance clearly shows that it “can easily remain a strong and resilient company.”

In addition, reports state that other suitors could emerge. This means that Cleveland-Cliffs, which previously bid for the company, could come back with a lower offer. However, its market value is now smaller than that of U.S. Steel.

“One would suspect that Nucor and Cleveland Cliffs will be in discussions with U.S. Steel, but based on presidential messages, one would think the U.S. government may come to its aid and invest in its infrastructure,” said Jay Woods, chief global strategist at Freedom Capital Markets.

Mr. Trump’s Position

Mr. Trump, who takes office on Jan. 20, has repeatedly vowed to block the sale. Below given is a view that he shared with Mr. Biden.

“I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan,” he wrote on his Truth Social platform last month. “As president, I will block this deal from happening. Buyer Beware!!”

It has been recorded that Mr. Trump’s transition team did not comment on Friday. However, several current and former Republican officeholders on Friday criticized Mr. Biden’s decision. This is because they think that it would cost investment in the U.S.

U.S. – Japanese Relations (US Steel Nippon deal)

Furthermore, some analysts have warned that blocking the deal could sour relations between the United States and Japan. This would be very bad as Biden had previously worked on improving to counter the threat of China’s economic and military rise.

On top of that, Japan is the top investor in the U.S., and it is known that its biggest business lobby has raised concerns about political pressure on the deal, a view the White House rejected.

“It would have helped us rebuild our competitiveness and counter China. To do this effectively, we need our friends, particularly Japan,” Wendy Cutler wrote on social media platform X, who served as a senior trade negotiator under former President Barack Obama.

Mr. Trump’s stance on trade could add to that unease when he returns to office. He has already threatened heavy tariffs on key allies Canada, Mexico, and Europe.

Conclusion – US Steel Nippon Deal

Thus, this is all that you need to know about the US Steel Nippon deal. Therefore, get into knowing all about the US Steel Nippon deal and read about it thoroughly. This will help you to know a lot of things about the US steel stock, especially if you are aiming to invest in it. Thus, this means that the Nippon steel US steel deal topic is very important and must be taken into great consideration.