Biden blocks bid to buy U.S. Steel, but the saga appears far from over

This story was originally published by Iron Range Today. This link was updated with the latest version on Jan. 6.

In the final days of 2024, as President Joe Biden weighed what seemed like an inevitable decision to reject Nippon Steel’s bid to buy U.S. Steel, the companies had one last offer to make.

A decade-long promise of continued domestic production levels that only federal officials could approve to reduce.

But the eleventh-hour concessions meant to soothe opponents of the American industrial titan’s pending sale to a Japanese corporation – a nearly $15 billion transaction challenged by protectionist ideologies and national security concerns – appear to run counter to the companies’ selling point.

Nippon’s offer to federal officials of a 10-year production capacity guarantee at some U.S. Steel facilities — levels reduced only with approval from the Committee of Foreign Investment in the United States (CFIUS) — was an effort to “proactively address any concerns that could be raised,” they said.

A joint press release Friday from the companies, though, only mentions the guarantee applying for Pennsylvania, Arkansas, Alabama, Indiana and Texas — not Minnesota or Illinois, where union-heavy operations are housed.

The absence of Minnesota, which notably includes the Keetac and Minntac mines owned by U.S. Steel on the Iron Range, left open the potential for crushing impacts on the region and 1,000-plus jobs at the two mines should production be curtailed or idled.

It also underscores some of the hesitation expressed by the CFIUS review, and Biden in his rejection of the sale, though the committee did not make a formal recommendation on the bid.

Concerns centered on whether selling to a Japanse corporation posed a national security threat because of the potential for American steel production to decline if Nippon’s business interests and its investment promises clashed. They also expressed the potential for Nippon to import its product to the U.S. and avoid production costs domestically, which could lead to idles or closures.

“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,” Biden said in a statement Friday morning. “And it is a fulfillment of that responsibility to block foreign ownership of this vital American company.”

Biden’s formal rejection of the Nippon Steel bid has placed U.S. Steel, and those in its orbit, into what is now a state of indefinite purgatory. The landscape from here is likely to move at a more glacial pace than when the proposed transaction started in December 2023, even as the broader fallout and impacts have yet to be realized.

U.S. Steel, in one form or another, is now squarely on the auction block, with the company and Nippon vowing Friday to pursue legal action against what they called an “unlawful” decision. That process has the potential to drag out for years.

For United Steelworkers leadership, their attempt to force a sale to Cleveland-Cliffs exposed the lack of protections supposedly provided by the collective bargaining agreement with U.S. Steel. Their eggs were placed in one, so far unsuccessful, basket.

The domestic steel industry as a whole finds itself at a crossroads between a potential infusion of technology and foreign investment, and its roots with independent American labor that have long-defined it. The dynamics at times fracturing the relationship among union leaders, rank-and-file workers, executives and politicians.

As the dust settles from Biden’s order, the century-old feud between U.S. Steel and the Steelworkers — which culminated in its penultimate battle over the sale — resembles the scorched earth approach they took to this point.

What the future looks like today is comparable to standing in the middle of an the open pit at Minntac, in the middle of a wind storm. Nobody really knows what’s coming next.

The companies have already promised litigation would be the next step, and that they were “left with no choice” but to pursue those challenges. They argued Biden had undue influence in the CFIUS review process to “manipulate” it toward political outcomes.

“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,” the companies wrote. “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.”

Biden granted Nippon an extension with CFIUS fall that pushed the decision timeline beyond the 2024 Election in November, and with Trump and Democratic nominee Vice President Kamala Harris against the merger, intensified the criticism that the sale was a mere political pawn as the sides fought for blue collar, union votes.

Yet with the transfer of power between Biden and President-elect Donald Trump taking place in just over two weeks, the companies aren’t expected to find a friendlier reception with an incoming White House administration tasked with defending any federal government challenge.

Trump, on a number of occasions, has remained vocal in his opposition to the deal, though analysts have propped up the deal as healthy for the industry in the long run. On Friday, Trump didn’t comment on the rejection, instead simply posting “MAKE AMERICA GREAT AGAIN!!” on his Truth Social page within minutes of the Biden order.

Should the Nippon sale ultimately fail, numerous industry sources said the company’s availability would likely attract a number of suitors interested in buying select assets, as opposed to a one-off sale of the company.

Considering Nippon and Cliffs were the only serious bids for the full U.S. Steel suite — and both presented real regulatory hurdles to overcome — a parts sale is an outcome that would potentially erase the U.S. Steel name from the business lexicon.

That outcome could still leave an opening for Cliffs to grab up some assets to add to its growing footprint as a steelmaker, which would satisfy the Steelworkers in part, but also raise questions about what operations — if any — Cliffs would need to maneuver to overcome antitrust concerns. It also leaves open the potential some union operations are sold off from under the U.S. Steel name without a clear path forward themselves.

USW President David McCall said U.S. Steel is financially healthy enough to continue on its own, citing the $1.8 billion balance sheet in the company’s third quarter earnings report, but serious questions exist on whether the relationship is beyond repair. Any transactions aside, they could find out in September 2026, when the current labor contract is set to expire.

“It’s clear from U.S. Steel’s recent financial performance that it can easily remain a strong and resilient company,” McCall said in a statement. “We now call on U.S. Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable.”