US-JAPAN: Biden Officially Blocks US Steel Acquisition

US President Joe Biden has officially blockedthe proposed acquisition of US Steel by Japanese firm Nippon Steel. The move, which was widely expected despite an attempt by Nippon Steel to sweeten the deal by offering the US government a veto over production cuts, is likely to result in litigation and potentially harmful knock-on effects to the US-Japan bilateral relationship. The acquisition was also opposed by President-elect Donald Trump on the election campaign trail.  

• The decision came after the United Steelworkers union said in a statement yesterday, "Nippon is a serial trade cheater that for decades built its business model on adding to global overcapacity and threatening the U.S. industry.”
• Biden said in a statement: "Today’s action reflects my unflinching commitment to utilize all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security."
• The Washington Post reported that Biden, "opted to kill the deal despite intense efforts by some of his senior advisers to sway him in recent days, who warned that rejecting a sizable investment from a top Japanese corporation could damage U.S. relations with Japan.”
• Semafor noted this morning: “Biden’s announcement will likely worsen ties with Tokyo, a key ally, and undermine Washington’s argument that it treats partners and rivals differently when it comes to trade and takeovers.”