Biden stops Nippon takeover from US Steel

Biden stops Nippon takeover from US Steel

President Joe Biden blocked the acquisition of US Steel worth $ 14.3 billion on Friday by Japan's Nippon Steel. This marks a significant use of his executive authority in the last days of his term.

Significance of the steel industry for national security

In a message, Biden said: "As I have already said, steel production - and the steel workers who manufacture them - are the backbone of our nation. A strongly balanced steel industry operated in Germany is an essential national security priority and plays a decisive role for resilient supply chains."

Political effects of the decision

The step, first of the Washington Post and the New York Times Reported, did not come as a surprise, could have an impact on future foreign investments in American companies. Biden has long voted against the deal, which was announced a year ago. The designated President Donald Trump has also expressed his contradiction to this project and announced that it is also blocking the deal as soon as he is in office.

Criticism and legal steps

The planned acquisition is politically controversial because it announced in December 2023 became and Bipartisans resistance has caused. Blocking the deal could be politically popular within the country, but would prevent foreign investors from other US companies. Us Steel could also withdraw the urgently needed investments.

The committee for foreign investments in the United States (CFIUS) has biden at the end of the last month communicated that it has not reached a consensus whether the sale of US Steel to Nippon is a risk to national security. This gives the President the decision as to whether he wants to block the deal for national security reasons.

Assurance of the etc.

The United Steelworkers (etc.) trade union vehemently protested from the start, since Nippon did not give enough guarantees to protect the job -bound jobs in the company's older works. However, Us Steel and Nippon Steel have given a joint explanation in which they announce to initiate legal steps. "We are dismayed by President Biden's decision," says the explanation. "The President's declaration and arrangement does not bring credible evidence of a security problem and clearly show that this was a political decision. We are forced to take all reasonable steps to protect our legal rights."

Financial necessity for US Steel

The etc. welcomed the decision and is convinced that it is the right step for its members and for national security. However, Us Steel and Nippon argue that the deal is necessary to secure investments in the domestic steel businesses of US Steel. Us Steel claims that it could be forced to close the works represented by the etc. if Nippon Steel does not invest the planned $ 2.7 billion.

In their joint explanation, they repeated this argument: "Blocking this transaction means refusing billions of firmly promised investments that are necessary to extend the lifespan of US Steels aging plants and endanger thousands of well -paid jobs." However, the union stated that the company can continue to work profitably without investing Nippon.

Insight into the historical perspective

The steel industry stood for prosperity in the 19th and 20th centuries. The workforce hiked to cities like Pittsburgh to find better living conditions and jobs in the factories. However, the former size of US Steel has dropped in recent decades. While the company was once with 340,000 employees, today there are only approximately 14,000 US employees, of whom 11,000 etc. members are. The situation is also reflected in the share prices, which have recently fallen by almost 6 %.

The etc. is confident that with responsible management US Steel can continue to secure jobs and wishes for the future robust economic and national security. Nevertheless, uncertainty about the future of the steel industry remains in the United States.