Biden blocks $15B Nippon-U.S. Steel deal; Gary mayor warns of possible job losses
GARY, Ind. - Nippon Steel Corp. of Japan and U.S. Steel announced plans to pursue legal action after President Joe Biden blocked their nearly $15 billion acquisition agreement.
The president followed through on a vow he made in March to prevent Nippon Steel’s purchase of U.S. Steel, one of the nation’s largest steel producers.
U.S. Steel operates major facilities in Gary, Indiana, employing nearly 2,000 people. Last month, Gary Mayor Eddie Melton previously warned that blocking the deal could lead to mill closures.
In a statement on Friday, the mayor expressed disappointment with the decision:
"I am deeply disappointed with President Biden's decision to block the Nippon Steel deal. As mayor, my job is to protect and build the future for my citizens, and I believe strongly that this transaction was the best deal on the table for steelmaking families in cities like Gary.
"I have spent months doing my due diligence and discussing this deal with mayors around the country, as well as members of the Congressional Black Caucus in Washington, DC. I have met with steelworkers and union leadership and listened to their valid concerns.
"In Gary, the stakes are high. As the son of a steel worker and product of a union household, I witnessed firsthand the pain of job loss and divestment, evidenced in the facades of abandoned buildings and vacant houses in my neighborhood. Like many others, I was initially skeptical but now, I firmly support the Nippon Steel deal.
"I want to acknowledge the proactive efforts made by Nippon Steel's Vice Chairman, Takahiro Mori, in addressing national security concerns raised by stakeholders, including union and government officials.
"Nippon Steel has voluntarily and publicly committed to various mitigation measures, including ensuring key positions are held by U.S. citizens; maintaining production capacity within the U.S.; removing any Nippon Steel involvement in trade measures proposed by U. S. Steel; prohibiting the transfer of any production and jobs outside the U.S.; guaranteeing that production capacity at U. S. Steel's facilities in Pennsylvania, Arkansas, Alabama, Indiana and Texas would not be reduced for ten years without approval from CFIUS; and more. Unfortunately, CFIUS did not consider any of these proposed agreements or mitigation measures.
"Yesterday, we had a guaranteed deal in hand. The potential sale of U.S. Steel to Nippon Steel represented a significant opportunity for Gary and the American steel industry to grow and prosper. Now, we face an uncertain future, with Gary Works potentially losing investment and jobs."
The White House defended the decision, emphasizing the importance of keeping U.S. Steel under American ownership.
"CFIUS evaluation determined this acquisition would place one of America's largest steel producers under foreign control and create a risk for our national security and our critical supply chains," said White House Press Secretary Karine Jean-Pierre.
Rep. Frank Mrvan, who represents Indiana’s 1st District, voiced support for the president’s decision. President-elect Donald Trump said he opposed the deal.
In a joint statement, Nippon and U.S. Steel said Biden's decision to block the deal "reflects a clear violation of due process and the law" and called it "manipulated" to advance Biden's political agenda.