Biden plans to block the takeover of US Steel by Nippon Steel: Job losses feared

US President Joe Biden is preparing to block the acquisition of the venerable American steel company US Steel by the Japanese firm Nippon Steel. This controversial decision, which, according to US media reports, is imminent, could lead to significant job losses and deter foreign investment in the US. The $15 billion deal was announced last year by Nippon Steel and US Steel. It would have created one of the world's largest steel companies outside of China and was welcomed by investors as a solution to the financial problems of the US firm. However, the plan soon met resistance from politicians and the US steel union, who did not want the 123-year-old company to fall into foreign hands. US Steel shares fell nearly 20% after reports of the planned decision. The affected company is headquartered in Pennsylvania, a battleground state during election season. Biden had already ordered an investigation into the deal at the beginning of the year on national security grounds and expressed his opposition to the takeover. His political rivals, including Donald Trump and Kamala Harris, also opposed the merger. US Steel itself stated that it had not received any official notification about the decision and continued to insist on the deal. "We expect to explore all possible legal options to ensure that this transaction, which represents the best future for Pennsylvania, the American steel industry, and all our stakeholders, is completed," said a company spokesperson. On Wednesday, the company held a rally in support of the merger, warning that blocking the deal could endanger "thousands of jobs." This could lead to plant closures and a possible relocation of the headquarters out of Pennsylvania. "We want elected leaders and other decision-makers to recognize the benefits of the deal and the inevitable consequences if the deal fails," said US Steel CEO David Burritt in a statement. The acquisition is currently being reviewed by the Committee on Foreign Investment in the US (CFIUS), a Treasury Department-led group that examines national security concerns. The Treasury Department declined to comment on the President's decision. White House Press Secretary Karine Jean-Pierre said on Wednesday that the CFIUS had not yet made a recommendation to the President. A White House official told the BBC that receiving the CFIUS recommendation is the "next step in this process." Since 2020, the US has formally blocked only five foreign investments through the CFIUS, involving deals with Chinese companies. Nippon Steel is based in Japan, an ally of the US. Earlier this year, the US Chamber of Commerce warned against the politicization of such reviews, as it could send a "deterrent signal" to foreign companies. While the case is unusual due to CFIUS involvement, political interventions in the steel industry are not, said Alan Wolff of the Peterson Institute for International Economics. Over 20 years ago, George W. Bush, "otherwise a free trader," introduced protective measures for the steel industry. Donald Trump's administration was also marked by a trade dispute over tariffs imposed to protect US steel manufacturers. Biden modified these safeguards, easing tensions with allies but maintaining some security measures. The economic significance of US Steel, founded by Andrew Carnegie, has declined but still plays an important role in the national consciousness, explained Wolff. "It has a large share in our perception of where the manufacturing industry has gone and what threats there are to jobs in the manufacturing sector," he said. "This is a core component of the Biden administration and a major issue in this election campaign," he added.