Early Friday morning, President Joe Biden announced he has rejected the nearly $15 billion proposed deal for Nippon Steel of Japan to purchase Pittsburgh-based U.S. Steel — affirming his vow in March to block the acquisition.

“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 wrote in part when announcing the block. His full statement can be found at the bottom of this article.

His decision comes after the Committee on Foreign Investment in the United States, known as CFIUS, failed to reach consensus on the possible national security risks of the deal last month, and sent a long-awaited report on the merger to Biden who had 15 days to reach a final decision.

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.

U.S. Steel employs thousands of workers on Minnesota’s Iron Range at Minntac in Mountain Iron and Keetac in Keewatin, where taconite is mined and processed into iron ore pellets to be use in steelmaking facilities.

5 EYEWITNESS NEWS has reached out to 8th Congressional District representative Pete Stauber (R-Minnesota), for comment and will update this article with his response once we hear back.

A U.S. official familiar with the matter, who spoke on condition of anonymity, told The Associated Press last month that some federal agencies represented on the panel were skeptical that allowing a Japanese company to buy an American-owned steelmaker would create national security risks.

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.

Biden previously came out against the deal last March — and was backed by the United Steelworkers, concerned over whether the company would honor existing labor agreements or slash jobs as well as the firm’s financial transparency.

“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.”

President-elect Donald Trump has also opposed the acquisition and vowed in December on his Truth Social platform to block the deal and to use tax incentives and tariffs to grow the company. Steelworkers’ union President David McCall said last month that the union welcomed Trump’s opposition to the sale and said “it’s time for this deal to be rejected so we can all focus on the future.”

Nippon Steel announced in December that it planned to buy the Pennsylvania steel producer for $14.1 billion in cash — and despite committing to keep the U.S. Steel name and Pittsburgh headquarters — its proposal raised concerns about what the transaction could mean for unionized workers, supply chains and U.S. national security.

Still, the deal had many supporters, including lawmakers and business groups like the U.S. Chamber. Mike Pompeo, who served as Trump’s first secretary of state called a potential rejection of the deal “shortsighted” in the Wall Street Journal.

“The deal would strengthen U.S. Steel’s current operations and production capacity, benefit its workers and their communities, and enhance the competitiveness of the American steel industry,” he wrote in December.

5 EYEWITNESS NEWS also reached out to U.S. Steel for comment on Biden’s decision. The company issued the following joint statement with Nippon Steel late Friday morning:

“We are dismayed by President Biden’s decision to block Nippon Steel’s acquisition of U. S. Steel, which reflects a clear violation of due process and the law governing CFIUS. Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda. The President’s statement and Order do not present any credible evidence of a national security issue, making clear that this was a political decision. Following President Biden’s decision, we are left with no choice but to take all appropriate action to protect our legal rights.

Nippon Steel and U. S. Steel are confident that our transaction would revitalize communities that rely on American steel, including in Pennsylvania and Indiana, provide job security for American steelworkers, enhance the American steel supply chain, help America’s domestic steel industry compete more effectively with China and bolster national security. Nippon Steel is the only partner both willing and able to make the necessary investments – including at least $1 billion to Mon Valley Works and approximately $300 million to Gary Works as a part of $2.7 billion in investment that it has already committed – to protect and grow U. S. Steel as an iconic American company for the benefit of the communities in which it operates and the entire American steel industry. Blocking this transaction means denying billions of committed investment to extend the life of U. S. Steel’s aging facilities and putting thousands of good-paying, family-sustaining union jobs at risk. In short, we believe that President Biden has sacrificed the future of American steelworkers for his own political agenda. We are committed to taking all appropriate action to protect our legal rights to allow us to deliver the agreed upon value of $55.00 per share for U. S. Steel’s stockholders upon closing.

Since the outset of the regulatory review process, we have diligently and transparently engaged with CFIUS. The record before CFIUS is abundantly clear that this transaction, with the commitments made by Nippon Steel, would strengthen, not weaken, national security. Yet, it is clear that the CFIUS process was deeply corrupted by politics, and the outcome was pre-determined, without an investigation on the merits, but to satisfy the political objectives of the Biden White House. It is shocking — and deeply troubling — that the U.S. government would reject a procompetitive transaction that advances U.S. interests and treat an ally like Japan in this way. Unfortunately, it sends a chilling message to any company based in a U.S. allied country contemplating significant investment in the United States.

To proactively address any concerns that could be raised by CFIUS, Nippon Steel voluntarily committed to various mitigation measures that would be fully enforceable by the U.S. government, including: having a majority of the go-forward board of directors of U. S. Steel be composed of U.S. citizens; having three independent directors who will be approved by CFIUS; ensuring that key positions such as CEO and CFO will be U.S. citizens; removing any Nippon Steel involvement in trade measures proposed by U. S. Steel; prohibiting the transfer of any production and jobs outside the U.S.; guaranteeing that production capacity at U. S. Steel’s facilities in Pennsylvania, Arkansas, Alabama, Indiana and Texas would not be reduced for ten years without approval from CFIUS; regularly reporting to CFIUS on the status of compliance with the national security agreement; and allowing CFIUS to send an observer to the board of directors. However, CFIUS did not give due consideration to a single mitigation proposal offered by the Parties, as evidenced by the absence of any written feedback to the four robust national security agreements that the Parties proactively offered over 100 days. We are deeply disappointed to see President Biden’s decision today.

We would like to express our sincere gratitude to the wide range of stakeholders in the United States and Japan, including U. S. Steel employees, local business and community members, government officials, and elected officials for their tremendous cooperation and enthusiastic support for this transaction. We will never give up on pursuing business in the U.S. for the benefit of the U.S. domestic stakeholders. We continue to believe that a partnership between Nippon Steel and U. S. Steel is the best way to ensure that U. S. Steel, and particularly its USW-represented facilities, will be able to compete and thrive well into the future – and we will work closely with stakeholders, including government officials from Japan and allies and partners in the U.S., to take all appropriate action to protect our legal rights and secure that future.”

U.S. Steel and Nippon Steel on Biden’s rejection

Continue reading for Biden’s full statement on his decision.

“As I have said many times, steel production—and the steel workers who produce it—are the backbone of our nation.  A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains.  That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.
 
For too long, U.S. steel companies have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, leading to job losses and factory closures in America. I have taken decisive action to level the playing field for American steelworkers and steel producers by tripling tariffs on steel imports from China.  With record investments in manufacturing, more than 100 new steel and iron mills have opened since I took office, and U.S. companies are producing the cleanest steel in the world. Today, the domestic steel industry is the strongest it has been in years.
 
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. As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.
 
So, that is why I am taking action to block this deal. It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company. U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.  
 
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. As I have made clear since day one: I will never hesitate to act to protect the security of this nation and its infrastructure as well as the resilience of its supply chains.”

President Joe Biden, on his decision to block Nippon Steel’s acquisition of U.S. Steel

The Associated Press contributed to this report.