CLEVELAND — President Biden Friday followed through on a promise to block the sale of US Steel to Japanese-owned Nippon Steel, citing national security reasons.
"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," Biden said in a statement.
"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."
The decision ends a 17-month battle that started in 2023 when Cleveland-based Cleveland Cliffs made an unsolicited bid for US Steel with the backing of the United Steelworkers Union. It was a bid rejected by the US Steel board but one that opened the door for other offers, which Nippon stepped up with.
When the US Steel Board accepted Nippon's offer, it united Democrats and Republicans in Washington for obvious reasons, Senator JD Vance told News 5 in 2023.
"I am worried that if US Steel just tries to go the highest bidder and that bidder's a foreign adversary, then we're going to be in a world of hurt in this country so I'd like to prevent that from happening," Vance said.
He joined Senator Sherrod Brown in creating a bipartisan alliance of senators from the steel-making Midwest. They lobbied the White House and the Committee on Foreign Investment in the US, which was reviewing the deal, to block it.
When that committee failed to rule last month, the final decision was left to President Biden. On Friday morning, during the final hours of Brown's tenure in the Senate, Biden blocked it. In his first interview as a private citizen, he told me that it was the right thing for the country.
"It's a national security issue because we just don't know enough about Nippon's ties with Chinese steelmakers and the Chinese government we think there's something there," said Brown, who lobbied against the deal through his final hours in office.
"I had spoken to people in the White House as recently as yesterday, over the New Year's weekend, into New Year's Day and after to make sure this happened," he said.
The question remains: What will this mean for Cleveland Cliffs, already the largest steel supplier to the US auto industry?
Acquiring US Steel would make it the only US steelmaker in the world's top ten.
In March of last year, we asked CEO Lourenco Goncalves if his offer would still be on the table if the Nippon deal were blocked.
RELATED: Cleveland-Cliffs CEO says he's still interested in acquiring US Steel, but no bid is on the table
"No, my bid is not on the table. We'll see what's going to happen, then we will evaluate from there," Goncalves said. "Of course I'm still interested in acquiring US Steel, it doesn't mean I have a bid on the table. They passed on opportunity to sell for more and to sell to a company that had the full support of the USW. Now they will have to handle the consequences of their decision."
News 5 reached out to Cliffs to talk about the White House decision and to discuss their next step, but we have not heard back. Brown, who lives not far from the Cliffs' Cleveland Works plant, hopes a deal will work out for the city of Cleveland.
"It's not up to me to as a Senator or as a former Senator, to say Cleveland Cliffs should be the purchaser. It is up to me to argue for a company that has a good relationship with its union, that treats its workers well, that's a leading industry in steel, and Cleveland Cliffs is that."
