Biden set to block U.S. Steel-Nippon sale, say reports

President Joe Biden is on the verge of blocking a proposed $14.9 billion sale of U.S. Steel to Japan’s Nippon Steel Co., according to reports from multiple outlets.

Bloomberg and Reuters reported Tuesday evening the president plans to kill the deal because of national security concerns.

A Financial Times story, however, suggests he could have trouble stopping the acquisition after the Pentagon, U.S. Treasury and State Department found it carries no national security risks.

These are among the most prominent agencies on the Committee on Foreign Investment in the United States, a panel chaired by the treasury that weighs the security implications of investments from abroad.

Other represented agencies, such as the departments of energy and commerce, reportedly have expressed reservations about the deal.

A unanimous recommendation to approve the sale would tie Biden’s hands, while a split panel or consensus to block it would leave the decision up to him. Analysts have told TribLive they don’t anticipate the report to be delayed, like it was in September.

The sale of the iconic Pittsburgh-based steelmaker was announced last December. It received immediate pushback from leadership at United Steelworkers, the union representing workers at U.S. Steel.

Politicians followed suit, including U.S. Sen. John Fetterman, D-Braddock, Republican President-elect Donald Trump, and then Biden.

They all said U.S. Steel should remain domestically operated and opposed the deal on national security grounds.

Trump reiterated last week his opposition to the sale and vowed to block the deal when he reaches office in January.

As part of the deal, Nippon has pledged to keep steel production in Pittsburgh’s Mon Valley, invest over $1 billion in the region’s three steel facilities and maintain U.S. Steel’s corporate headquarters in Pittsburgh.

But United Steelworkers union president David McCall told TribLive last month he remains firmly against any deal. He said he has little faith Nippon will make good on promises to pour investment into the Mon Valley Works, which some analysts say needs at least that much money to remain competitive.

Several local mayors in the Mon Valley — where three U.S. Steel facilities operate and employ over 3,000 steelworkers — have come out in support of the plan. Rank-and-file union members at U.S. Steel’s Mon Valley Works facilities also support the plan, according to United Steelworkers Local 2227 President Jack Maskil.

Maskil represents hundreds of workers at the Irving Works facility in West Mifflin and said last week he and other workers have come around to the Nippon purchase after meeting with Nippon Vice Chairman Takahiro Mori in October.

U.S. Steel has said, if the sale doesn’t go through, it will be forced to close the Mon Valley Works facilities. Several years ago, the company canceled a $1 bullion investment plan in the Mon Valley Works and then later invested in steelmaking facilities in Arkansas.

As reports come that the deal will be blocked, Nippon Steel announced Tuesday all U.S. Steel employees below senior-management level would receive a $5,000 bonus as a reward for the closing of the sale.

“We have listened to unions and government officials who have argued that, in large corporate transactions, rank-and-file employees often receive nothing that recognizes their contributions to the value generated for stockholders,” Mori said in the statement. “Our goal is to protect and grow U. S. Steel, and its people are the most important asset in achieving this goal.”

USW leadership hit back in letter to its membership, criticizing the offer as a “final, desperate attempt” to win rank-and-file support and a distraction from the “threat this transaction poses to our jobs, our industry and our national security.”

CFIUS must issue a determination on the sale by Dec. 23.

Bloomberg reported Tuesday that U.S. Steel and Nippon plan to pursue legal action if Biden blocks the deal.

Spokespeople for the companies declined to comment on the Financial Times report or share details about prospective litigation.