Japanese steelmaker vows not to give up on buying U.S. Steel

TOKYO — Japan’s largest steelmaker said Tuesday that it would not give up trying to purchase U.S. Steel even after President Joe Biden blocked the $15 billion bid last week over national security concerns.

The blocking of the proposed deal by Nippon Steel cast a shadow over a final visit to Japan by outgoing Secretary of State Antony Blinken, amid worries that it could sour U.S. relations with a key diplomatic and economic Asian ally — the two countries are each other’s biggest foreign investors.

Eiji Hashimoto, chairman and chief executive of Nippon Steel, the world’s fourth-largest steelmaker, said there was “no reason or need to give up” on the bid.

“This is not just the most important matter for our company’s business strategy,” he told reporters in Tokyo. “I am firmly convinced this is something extremely beneficial for both Japan and the United States.”

On Monday, Nippon Steel and U.S. Steel, which strongly supports the deal, sued the Biden administration and others over the decision, saying Biden ignored the rule of law to gain political favor with union members who opposed it.

“Never before has a President prohibited an acquisition by a company based in Japan, one of our closest allies,” they said in the lawsuit.

After meeting on Tuesday with Japanese Prime Minister Shigeru Ishiba, Blinken said the U.S.-Japan alliance was “stronger than it’s ever been before.” He did not answer a question from NBC News about the Nippon Steel bid.

The decision was left up to the White House last month after the Committee on Foreign Investment in the United States, a government panel that reviews foreign investments for national security risks, failed to reach consensus. In announcing his decision to block it on Friday, Biden said it was important to keep U.S. Steel American-owned to avoid undermining critical supply chains and putting jobs at risk.

“A committee of national security and trade experts determined this acquisition would create risk for American national security,” White House spokesperson Robyn Patterson said Monday in response to the lawsuit. “President Biden will never hesitate to protect the security of this nation, its infrastructure, and the resilience of its supply chains.”

The Justice Department declined to comment Monday on the lawsuit.

In its efforts to promote the deal, Nippon Steel has emphasized that U.S. Steel would remain American-run, its headquarters would remain based in Pittsburgh, and there would be no layoffs or plant closures as a result of the takeover. It also said the collapse of the deal would be a victory for China, which accounts for more than half of the world’s steel production.

The proposed acquisition of U.S. Steel, which is based in the battleground state of Pennsylvania, drew controversy almost as soon as it was announced in December 2023, as the United States headed into an election year. Though some U.S. Steel employees supported the deal, it was strongly opposed by the powerful United Steelworkers union.

Nippon Steel and U.S. Steel are also suing the United Steelworkers president, David McCall, as well as Lourenco Goncalves, the head of U.S. Steel rival Cleveland-Cliffs, accusing them of illegally coordinating to undermine the transaction.

McCall said he was reviewing the suit, while Goncalves accused the companies of trying to “scapegoat others.”

Biden campaigned against the bid, as did his successor as the Democratic nominee, Vice President Kamala Harris, and President-elect Donald Trump.

Trump, who has reiterated his opposition to the deal since winning the election in November, said Monday that blanket tariffs he has proposed on all U.S. imports would make U.S. Steel “a much more profitable and valuable company.”

Hashimoto said Tuesday that given the “extremely difficult and uncertain conditions” facing the U.S. steel industry, his company’s acquisition of U.S. Steel was the only way to ensure its continued prosperity.

“I do not believe that tariff policies alone will strengthen the industry,” he said.

Arata Yamamoto and Abigail Williams reported from Tokyo, and Jennifer Jett reported from Hong Kong.