Editorial: What does Biden’s block mean for U.S. Steel?
Share this post:
Pittsburgh is a steel town.
Pennsylvania is forged from coal and coke and iron. Maps are peppered with the words “furnace” and “mills.” The history of metal production in the Keystone State began in the 1700s — before America was a nation.
Did the end of that identity come Friday when President Joe Biden blocked the sale of U.S. Steel to Japan-based Nippon Steel?
U.S. Steel is, as its name suggests, synonymous with the country’s steel industry. It isn’t the largest producer anymore. Charlotte-based Nucor and Ohio’s Cleveland-Cliffs both produced more in recent years, but U.S. Steel still holds the bronze with 15.75 million tons, much of it flowing out of Southwestern Pennsylvania.
Nippon Steel is the largest producer in Japan and, according to the World Steel Association, the fourth largest globally. With almost three times U.S. Steel’s output, Nippon was able to make a $15 billion offer last year, four months after Cleveland-Cliffs put a $7.3 billion bid on the table. The larger offer was quickly snapped up — but that was the last thing that happened quickly.
Throughout 2024, bipartisan opposition from politicians and the United Steelworkers International has butted up against local mayors and union leaders. There is little Biden and President-elect Donald Trump agree on, but both stood against the merger, vowing to quash it. Biden just got the chance first.
In his order Friday, the president said there is “credible evidence” Nippon “might take action that threatens to impair the national security of the United States.” The move was Biden’s to make under the Defense Production Act after a split votes from the Committee on Foreign Investment in the United States failed to give the sale a green light or a stop sign.
There are obvious concerns now. What happens to steel production in the Mon Valley? What happens to U.S. Steel’s headquarters in Pittsburgh? Nippon made promises about both. Nippon also promised in August “no less than $1 billion” into local operations and since has made a reported 10-year guarantee about production in the region.
Those promises are more than words to steelworkers and homeowners and local businesses. They are lifelines.
What now?
Biden has no more skin in the game. He is out of office in three weeks. This was his last play in the matter. Nippon has 30 days to certify the deal is abandoned, but there will be another guy in office by then. Any future efforts are punted to the Trump administration.
“Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights,” Nippon and U.S. Steel said in a joint statement, condemning the move as political and saying there is no evidence of national security ramifications.
That seems like nothing is over yet. Trump has a history of changing his position on issues where he has been vocally opposed, like TikTok. With his former Secretary of State Mike Pompeo on Nippon’s payroll, perhaps there is a potential for dealmaking. But Vice President-elect JD Vance was one of the first and loudest voices against the sale, so maybe not.
What does seem clear is the Big Business concerns of two multibillion-dollar companies and the national security implications of putting vital building blocks in the control of a foreign power are the issues at play.
Pittsburgh’s history, Pennsylvania’s legacy and the lives of the people making the metal and living in the shadow of the mills? They may not matter at all.