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Biden Blocks Japanese Steelmaker's Acquisition of U.S. Steel

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Steel Industry,Merger,National Security

President Biden has blocked the proposed acquisition of U.S. Steel by Japan-based Esmark, citing concerns over national security and the impact on American steelworkers. The Committee on Foreign Investment in the United States (CFIUS) had failed to reach a consensus on the deal. Biden's decision could potentially strain relations between the U.S. and Japan.

The United States Steel Mon Valley Works Clairton Plant in Clairton, Pa., is shown on Monday, Feb. 26, 2024. “We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said in a Friday morning statement.

The committee, chaired by Treasury Secretary Janet Yellen and made up of other Cabinet members, can recommend that the president block a transaction, and federal law gives the president that power. The decision, which comes just weeks before the Democratic president is set to leave office, could potentially damage relations between the U.S. and Japan, which is America’s biggest ally in Asia. Japan is also the largest foreign holder of U.S. debt.

“It is important that we maintain strong American steel companies powered by American steel workers,” Biden said in a March statement, while he was still seeking reelection to the presidency before dropping out of the race. “U.S. Steel has been an iconic American steel company for more than a century, and it is vital for it to remain an American steel company that is domestically owned and operated.

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