Steel stocks took a sharp hit as the White House prepares to block the $14.9 billion takeover of U.S. Steel by Japan’s Nippon Steel. President Joe Biden is expected to announce his decision to halt the acquisition soon, according to a report by The Washington Post. Following the news, U.S. Steel shares plummeted more than 20% on Wednesday.
The proposed deal has faced strong opposition from both sides of the political aisle. Vice President Kamala Harris, the Democratic presidential nominee, stated at a campaign event in Pittsburgh that U.S. Steel “should remain American-owned and American-operated.” Former President Donald Trump, the Republican nominee, has also voiced his disapproval of the deal.
U.S. Steel CEO David Burritt warned that if the acquisition is blocked, the company might be forced to close plants and relocate its headquarters from Pittsburgh, signaling potential upheaval in the American steel industry. Meanwhile, a Nippon Steel spokesperson argued that the acquisition would revitalize the American Rust Belt and strengthen U.S. national security, claiming, “Simply put, U.S. Steel and the entire American steel industry will be on much stronger footing because of Nippon Steel’s investment.”
The bipartisan resistance to Nippon Steel’s takeover reflects a growing trend of protectionism in the U.S., even against companies from close allies like Japan. U.S. Steel shares have fallen 41% this year, highlighting ongoing challenges in the sector amid political uncertainty and market turbulence.
