Shares in the United States Steel Corporation plummeted after reports emerged that President Joe Biden is planning to block Japan’s Nippon Steel Corporation from purchasing the company, according to sources who spoke with the Washington Post on condition of anonymity. The acquisition has been under investigation by the interagency Committee on Foreign Investment in the United States (CFIUS) for potential national security implications. If such a deal were to go through, it would mark Japan’s largest foreign investment in decades.
The announcement comes as shares in U.S Steel finished the day down 17.5. Former President Donald Trump had previously vowed to block Nippon Steel from purchasing U.S Steel, saying he would “invoke the Defense Production Act” to “quickly ramp up capacity of essential products.” Upon taking office, I will invoke the Defense Production Act wherever it is necessary to quickly ramp up capacity of essential products, and I will stop Japan from buying U.S. Steel.
In December 2023, it was announced that U.S. Steel would be sold to Nippon Steel. The deal has been met with opposition from some lawmakers such as Sen. JD Vance (R-OH), Sen. John Fetterman (D-PA), and Sen. Bob Casey (D-PA. Sen. Fetterman has previously written to Treasury Secretary Janet Yellen calling for the deal to be blocked.
David Burritt, CEO of U.S Steel, warned that without the sale of U.S Steel to Nippon Steel, the company would largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk. In addition to this warning, Nippon Steel reportedly recently “increased its planned investment in the new U.S. Steel by $1.3 billion,” according to the outlet. The Japanese company said the extra money would modernize two of U.S Steel’s largest facilities, the Mon Valley Works in Pennsylvania and Gary Works in Indiana.