Biden rejects proposed Japanese deal to acquire US Steel

US President Joe Biden has rejected the nearly US$15 billion proposed deal for Nippon Steel of Japan to purchase Pittsburgh-based US Steel, affirming his vow in March to block the acquisition.

“We need major US 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.

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.

A US 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 sceptical 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 US and Japan, which is America’s biggest ally in Asia. Japan is also the largest foreign holder of US debt.