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PPI Statement on Biden’s Decision to Block Nippon Steel Purchase of U.S. Steel

• January 3, 2025

Today, PPI issued the following statement in response to President Biden’s decision on Nippon Steel’s purchase of U.S. Steel:

“President Biden’s decision this morning to block Nippon Steel’s purchase of U.S. Steel is a bad mistake on the merits, and the White House’s explanation of the reasons is so opaque and so lacking in substance as to suggest that it knows this. Here is the core of the release (with ellipses stripping out some legal language):

‘(a) There is credible evidence that leads me to believe that … Nippon Steel Corporation … through the proposed acquisition of United States Steel Corporation … might take action that threatens to impair the national security of the United States; and

‘(b) Provisions of law, other than section 721 and the International Emergency Economic Powers Act … do not, in my judgment, provide adequate and appropriate authority for me to protect the national security in this matter.’

“Nothing in the release hints in any way as to what ‘action’ Nippon Steel might take and how it might differ from the actions of the company’s steelmaking facilities in Alabama for over a decade. Neither does it suggest what the ‘credible evidence’ the statement mentions might involve. Still, less does the release offer any way to resolve the questions raised if this mutually agreed-upon transaction doesn’t go ahead:

• Will U.S. Steel now follow through on its statement earlier this year that blocking the transaction would lead to the closure of western Pennsylvania steel mills? If so, how would the administration explain its decision to the affected communities and workers?
• How does the administration view the possibility of a blast-furnace steel monopoly emerging as a result of an alternative purchase, and its impact on downstream industries such as auto production?
• Does the administration, in general, feel that foreign investors from allied countries such as Japan, Korea, the European Union, Canada, and the U.K., who employ a quarter of all U.S. manufacturing workers, are unreliable?

“Looking forward, it is very likely to have set a bad precedent for future CFIUS (Committee on Foreign Investment in the United States) decisions on sensitive transactions, which up to now have been civil-service driven and based on objective criteria. As such, it does a disservice to U.S. businesses, to foreign firms interested in manufacturing and employing skilled workers in the United States, and to consumers and unions sharing an interest in transparent decision-making with a clear statutory basis. It also creates deep uncertainty about the future of U.S. Steel, and in particular, its Pennsylvania operations.

“Little about the rationale for this very controversial decision, with its attendant damage to an important alliance and its potential harm to American heavy industry, is clear. The Biden administration owes the country a better explanation, and we hope it will provide one in its remaining days.”

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org. Find an expert at PPI and follow us on Twitter.

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Media Contact: Ian O’Keefe, iokeefe@ppionline.org