The Biden administration is set to block Nippon Steel's $14.9 billion acquisition of U.S. Steel, citing concerns over national security. The U.S. government believes the deal could weaken the domestic steel industry, which is critical for national defense and infrastructure. This potential move comes after thorough scrutiny by the Committee on Foreign Investment in the United States (CFIUS), which flagged the acquisition as risky for the country’s steel supply chain.

Both Nippon Steel and U.S. Steel have attempted to downplay the security risks, arguing that the deal would benefit the steel sector, preserving jobs and improving industrial operations. However, political figures, including President Joe Biden and Vice President Kamala Harris, have expressed opposition to the acquisition. They emphasize the importance of maintaining a strong domestic steel industry to safeguard the country’s defense interests.

Former President Donald Trump has also weighed in on the issue, aligning with the Biden administration in opposing the acquisition, a rare bipartisan stance on a major economic matter. U.S. Steel’s leadership has warned that blocking the deal might lead to factory closures and job losses, particularly in Pittsburgh, where the company has historically had a significant presence.

Despite these warnings, the Biden administration appears committed to preventing the deal from moving forward. The concern is not only the economic implications but also the strategic importance of the steel industry in the U.S., especially as foreign companies attempt to gain a foothold in key sectors. The final decision is expected soon, and it could have a wide-ranging impact on both U.S. industrial policy and its relations with Japan, an important ally.

Disclaimer: This Image was taken from Kazuhiro NOGI / AFP