Gene J. Puskar/AP

Steel Mon Valley Works Clairton plant in Pennsylvania on February 26, 2024.



CNN

President Joe Biden said Thursday he believes it is “critically important” that US Steel remains American-owned and operated, dealing a blow to the iconic company’s planned sale to Japan’s Nippon Steel.

The announcement marks the strongest opposition yet from the White House to a controversial deal that has drawn some bipartisan criticism.

“It is important that we maintain strong American steel companies, powered by American steelworkers. I told our steelworkers I stand with them, and I meant it,” Biden said in a statement. “US Steel has been an iconic American steel company for more than a century, and it is critical that it remains a domestically owned and operated American steel company.”

The Biden administration is concerned about some of Nippon’s assets in China, a person familiar with the administration’s thinking told CNN.

US Steel was not immediately available for comment.

In a statement, Nippon Steel said: “Our goal is to strengthen and grow US Steel in the US market in a way that prioritizes its talented employees, and we have made significant commitments to the USW in our ongoing efforts to to reach a mutually acceptable solution. … Nippon Steel is the right partner to ensure that US Steel continues to thrive as an iconic American company for generations to come.”

The Biden administration previously expressed support for a major overhaul of the $14.1 billion deal announced in December. Lael Brainard, director of the National Economic Council, issued a statement that month saying Biden believes the deal deserves “serious scrutiny” in terms of its impact on national security and supply chains.

Shares of Pittsburgh-based US Steel fell 13% on Wednesday – the worst day since 2020 – after the Washington Post and other media reported that Biden planned to express veiled opposition to the sale ahead of the arrival of the Japanese Prime Minister Fumio Kishida in Washington for a state visit on April 10.

US Steel shares fell another 3% on Thursday.

It’s notable that Biden is voicing his opposition to the deal ahead of the national security review believed to be underway by the Committee on Foreign Investment in the United States, or CFIUS. That inter-agency panel is headed by the finance minister and is supposed to weigh deals without regard to politics.

The Treasury Department declined to comment.

After Biden’s statement, the US Chamber of Commerce warned against politicizing the US Steel deal and said the transaction should go ahead if the CFIUS investigation shows there are no national security concerns.

“Attempts to politicize the purpose of the CFIUS sales review are “both inappropriate and counterproductive,” John Murphy, chief international officer at the U.S. Chamber of Commerce, said in a statement. “Japanese investments in the U.S. support nearly a million American jobs, and officials must be careful not to send a chilling message to international companies that U.S. policies could jeopardize their job-creating investments in the U.S.”

Michael Leiter, head of CFIUS and national security practices at law firm Skadden, Arps told CNN that Biden’s comments are “highly unusual, although not unprecedented, given the increasingly politicized U.S. investment issues.”

“That the White House has repeatedly commented on this issue, without dictating the outcome, is certainly a signal that the path is not getting smoother for CFIUS approval,” Leiter said, “and it signals to our allies like the Japanese send a signal that protectionism is not dead.”

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