Biden rejects Japanese firm’s purchase of U.S. Steel

President Joe Biden on Friday said he was blocking the purchase of U.S. Steel by Japanese company Nippon Steel. He did so to ensure that the majority of American steel was manufactured inside the United States, which he emphasized was in the country’s best interest.

U.S. Steel said last month that the merger with Nippon Steel would actually have enhanced U.S. Security. The company argued it was the best way to ensure that U.S. Steel continued to thrive in the future. U.S. Steel CEO David Burritt argued in an op-ed published in The New York Times that Chinese steel manufacturers wanted the deal to fail.

Does Biden have the authority to reject business deals like this? A section of the Defense Production Act of 1950 established the Interagency Committee on Foreign Investment in the United States. The committee reviews proposed transactions involving foreign individuals or companies to determine what effect the transaction would have on U.S. national security. The committee then presents the president with its findings. The president then has 15 days to decide whether to permit or prevent the transaction.

What does President-elect Donald Trump have to say about this? Trump last month said that he also would block the merger from taking place once he was in office. He said that his administration would use tax incentives and tariffs to make U.S. Steel strong again—and promised to do so quickly.

Dig deeper: Listen to David Bahnsen and Nick Eicher’s discussion on The World and Everything in It podcast about tariffs and Trump’s stated financial policies.