On January 3, 2025, President Joseph Biden issued a Presidential Order blocking an approximately $15 billion proposed acquisition by Nippon Steel Corporation (Nippon Steel) of Japan to purchase Pittsburgh-based United States Steel Corporation (U.S. Steel). Explaining that the proposed acquisition might result in actions that threaten to impair the national security of the United States, the Order requires the parties to take necessary steps “to fully and permanently abandon” the transaction within the next 30 days.
Biden’s decision fulfills the pledge he made on the presidential campaign trail that he would reject the proposed sale, which was first announced in December 2023, to ensure that the country’s third-largest steelmaker in the United States remained domestically owned. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” Biden said in a statement announcing that he was blocking the deal.
Biden’s decision comes after the Committee on Foreign Investment in the United States (CFIUS) submitted its long-awaited report on the proposed acquisition last month and indicated that it had failed to reach a consensus on the existence of national security risks posed by the potential acquisition. Chaired by the Secretary of the Treasury and comprised of other cabinet members, CFIUS is an interagency committee that reviews certain transactions involving foreign investment in the United States to determine the effect of such transactions on national security. At the end of its reviews, CFIUS either approves a transaction, directs the parties to change the terms of their agreement to mitigate national security risks, recommends the president block or unwind the transaction, or refers the matter for presidential disposition because of no consensus among CFIUS members regarding the existence of national security risks. Once in possession of the CFIUS report, by statute, Biden had 15 days to make his final decision.
The proposed deal was controversial despite Nippon Steel’s claim that the proposed all-cash deal would include a $2.7 billion investment to renovate aging U.S. Steel facilities and expand U.S. Steel’s production capabilities to assuage any concerns regarding U.S. Steel plant closures and layoffs. Opponents, however, questioned such enhancements and raised concerns about collectively bargained benefits that expire in September 2026. Opponents also questioned whether the deal, which would make Nippon Steel the third largest steelmaker in the world, would give Nippon Steel too much leverage in trade remedy cases brought by the domestic U.S. steel industry alleging injury (or the threat of injury) due to cheap foreign imports. Another controversy emerging from Biden’s decision is whether blocking such a proposed transaction will have a chilling effect on other foreign enterprises contemplating investment in the United States, especially those from prominent U.S. allies.
A joint statement issued by Nippon Steel and U.S. Steel criticized Biden’s decision, arguing that they had “diligently and transparently engaged with CFIUS” but “the outcome was pre-determined … to satisfy the political objectives of the Biden White House.” The joint statement, however, makes no mention of President-elect Donald Trump, who also voiced opposition to the proposed merger.
On January 6, 2025—the first business day after Biden’s decision to block the proposed sale—both Nippon Steel and U.S. Steel filed separate lawsuits to challenge the Presidential Order. In the lawsuit filed in the U.S. Court of Appeals for the District of Columbia, the two steelmakers advance their argument that the decision was tainted by election-season political considerations and lacked a rational legal basis. The other lawsuit, filed in the District Court for the Western District of Pennsylvania, accuses a U.S.-based steel-making rival of interfering in the proposed merger to reduce the merger’s chances of success.