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US President Joe Biden has blocked the takeover of US Steel by a bigger Japanese firm, delivering on a political promise despite fears the move could hurt Washington’s relations with Tokyo and scare off other foreign investors.
Biden cited threats to national security in rejecting the Nippon Steel purchase, saying US ownership was important to keeping the US steel industry and its supply chains strong.
His intervention follows pressure from the United Steelworkers union, which had opposed a transaction that was a sensitive political issue in the 2024 US presidential campaign.
The Japanese government has called Biden’s decision “incomprehensible”.
Nippon Steel and US Steel said Biden’s decision showed the review of the deal had been “corrupted” for political gain.
The two companies, which had previously threatened to sue the government if the deal did not happen, on Friday said they would take “appropriate action to protect their legal rights”.
“We believe that President Biden has sacrificed the future of American steelworkers for his own political agenda,” the companies said in a statement, adding that the move sent “a chilling message to any company based in a US allied country contemplating significant investment in the United States”.
Japanese officials also said they were disappointed by the decision.
“There are strong concerns from the economic circles of both Japan and the US, and especially from Japanese industry regarding future investments between Japan and the US, and the Japanese government has no choice but to take this matter seriously,” Japanese industry and trade minister Yoji Muto said in a statement to Reuters.
Biden’s decision comes a year after Nippon Steel first announced the $14.9bn (£12bn) deal to buy its smaller Pennsylvania-based rival.
It raises significant questions about the path forward for the company, a 124-year-old name that was once a symbol of American industrial might but is now much diminished.
It spent months looking for a buyer before a
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