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US President Joe Biden has blocked a $15bn deal by Japan’s Nippon Steel to buy US Steel, delivering a setback to Washington’s relationship with its closest Asia-Pacific ally.
Biden, who has long been opposed to the purchase, issued an order on Friday compelling Nippon Steel and US Steel “to fully and permanently abandon the proposed transaction” within 30 days.
His move comes just 17 days before he hands over the presidency to Donald Trump, who also opposes the deal.
In the order, Biden said there was “credible evidence” that through the acquisition, Nippon Steel “might take action that threatens to impair the national security of the United States”.
The bipartisan opposition to the deal in Washington is a sign of how far political sentiment has shifted against foreign investment in the US, particularly in strategic industries where labour unions wield heavy influence.
The announcement comes after the Committee on Foreign Investment failed to reach a consensus by a December 23 deadline on whether the acquisition posed a national security threat.
Biden’s intervention marks the failure of an ambitious expansion plan by Nippon Steel that morphed into a sensitive political issue in a US election year.
The opposition from the United Steelworkers union proved fatal to the deal despite intense lobbying in recent weeks from executives at US Steel and Nippon Steel.
US Steel shares were down almost 8 per cent in pre-market trading on Friday.
Opponents of the takeover welcomed Biden’s move.
“This deal was made behind closed doors without workers at the table. It represented a clear threat to America’s national and economic security and our ability to enforce our trade laws. It’s why we fought it every step of the way. The President is right to block it,” wrote Sherrod Brown, the outgoing Democratic senator from Ohio, on X.
