President Joe Biden announced on Thursday his opposition to the proposed $14.9 billion  acquisition of the United States Steel Corporation by Japan's Nippon Steel, stressing the necessity for the iconic American company to remain domestically owned. The statement marked Biden’s his first public opposition to the transaction.

"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," the president said.

The fate of the deal is uncertain as it's unclear if Biden will employ U.S regulatory powers to intervene. The Committee on Foreign Investment in the United States (CFIUS) holds the authority to potentially block the agreement on national security concerns.

In December, the White House highlighted the critical importance of U.S. Steel's role in national security, stating the deal warranted "serious scrutiny".

Nippon Steel defends acquisition

Nippon Steel defended the deal, saying the acquisition would deliver "clear benefits to U.S. Steel, union workers, the broader American steel industry, and American national security." 

"We are progressing through the regulatory review, including CFIUS, while trusting the rule-of-law, objectivity, and due process we expect from the U.S. Government. We are determined to see this through and complete the transaction," the Japanese company said.

Despite initial statements suggesting no layoffs or plant closures until September 2026, the company later amended its statement to guarantee no layoffs or closures due to the transaction.

Following Biden's statement, the U.S. Steel stock price plummeted by 18% in two days to $38.30 — significantly below the offer price of $55 per share. 

Nippon Steel shares were down 0.22% at the time of writing, while Japan’s Nikkei 225 index, where the steel giant is a constituent, also closed 0.26% down on the day. The Nikkei 225 has shed 1.34% over the past week.

Cleveland-Cliffs says it could consider another bid for U.S. Steel

Cleveland-Cliffs' CEO Lourenco Gonsalves expressed interest in revisiting a bid for U.S. Steel, potentially less than $30 per share, should the Nippon Steel deal collapse.

The controversy comes ahead of a scheduled April 10 summit between Biden and Japanese Prime Minister Fumio Kishida, which aims to strengthen the U.S.-Japan security alliance amid rising Chinese influence.

Biden, who seeks re-election and has strong union support, also called United Steelworkers International President David McCall on Thursday, saying that he had the “steelworkers’ back”.

 McCall said Biden's statements should end debate about the deal.

"Allowing one of our nation's largest steel manufacturers to be purchased by a foreign-owned corporation leaves us vulnerable when it comes to meeting both our defense and critical infrastructure needs," McCall said in a statement.

CFIUS meets with Nippon and USS, White House yet to comment

CFIUS has met with the parties to discuss the deal, according to a Reuters report citing a source familiar with the matter. The White House is yet to comment on potential intervention to block the acquisition.

According to a January filing, Nippon Steel has pledged to meet all requirements for CFIUS clearance, including a $565 million breakup fee if clearance is not obtained. 

Art Hogan, chief market strategist at B Riley Wealth in New York, told Reuters that foreign acquisitions always face challenges in the U.S., adding Nippon Steel has had to fight an uphil battle due to the timing of the deal.

"In an election year, it will be a heavy lift to get all the stakeholders comfortable with the acquisition of a U.S. manufacturing icon," Hogan added.

Nippon deal not the first Japanese attempt to acquire American steelworks

This isn't the first time Japanese steelmakers have been with involved with American steel companies, or with U.S. Steel. NKK Corp. acquired a large stake in National Steel during the 1980s. National Steel filed for bankruptcy two decades later, in 2002, and U.S. Steel acquired its assets for about $1 billion, incorporating them into its operations in the Midwest.

Nippon Steel, a top-five global steel producer, is approximately three to four times larger than U.S. Steel in terms of both revenue and production volume. Once the largest steelmaker in the world, U.S. Steel, established in 1901 by Andrew Carnegie and John Pierpont Morgan, has stood as an iconic symbol of American industry.

The Nippon deal values U.S. Steel stock at approximately $12.3 billion, with the entire company, including debt, valued at about $14.5 billion. This equates to roughly 6.7 times the average earnings before interest, taxes, depreciation, and amortization (EBITDA) generated in recent years — a standard metric for evaluating commodity-oriented businesses with earnings that fluctuate in tandem with the prices of natural resources.

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