In a significant move that could strain US-Japan relations, President Joe Biden is poised to block Nippon Steel’s £15 billion acquisition of US Steel. The announcement, expected as early as Friday, marks one of Biden’s final major decisions before leaving office.
The Japanese steel giant’s ambitious takeover bid encountered fierce opposition despite months of intensive lobbying efforts. The Committee on Foreign Investment in the US (Cfius) failed to reach a consensus by their 23 December deadline regarding potential national security implications of the deal.
Sources close to the matter indicate Nippon Steel is likely to pursue legal action against the presidential ruling. The legal proceedings could potentially expose whether political motivations, rather than genuine national security concerns, drove the decision-making process.
The collapse of this deal represents a significant departure from America’s traditionally open investment environment and might damage the carefully cultivated US-Japan alliance. Both nations’ officials express concern about broader implications for Japanese investment in America and the partnership’s stability.
Takahiro Mori, Nippon Steel’s vice-president, led last-minute efforts to secure approval, offering the government veto power over capacity reductions at most US plants. These concessions aimed to address Cfius concerns about potential domestic steel production decreases under Japanese ownership.
The decision marks a victory for US Trade Representative Katherine Tai and United Steelworkers union president David McCall, who strongly opposed the acquisition. President-elect Donald Trump had also vowed to protect the Pittsburgh-based company through tariffs and tax incentives, adding further political pressure to an already contentious deal.
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