LEILA FADEL, HOST:
President Biden has formally blocked the sale of US Steel to a Japanese company. Biden said in a statement that maintaining a domestic-owned steel industry is vital to America's national security. The move represents a rare exercise of presidential power to prevent a commercial transaction. It's a victory for the steelworkers union, which had opposed the sale, but critics say it could backfire. To discuss, NPR's Scott Horsley joins us. Good morning, Scott.
SCOTT HORSLEY, BYLINE: Good morning, Leila.
FADEL: So, not a surprise - Biden's said for months he opposed this deal, but now it's official. What's his reasoning?
HORSLEY: The president said in a statement that steel production and steelworkers are the backbone of the nation and that it's important for national security and for the nation's supply chains that a major share of steel production in the U.S. remain under domestic ownership and domestic control. Now, I should say, for all of its storied history, US Steel is not the industrial giant it once was. It's only the third-biggest steelmaker in the United States today. It accounts for less than 20% of the country's total steel production. But Biden was not willing to let this 124-year-old company with United States in its name fall under Japanese control.
FADEL: Now, President-elect Trump also came out against this sale. What does it say that both Biden and Trump agree on this?
HORSLEY: Well, it says that this is political but not partisan. You know, Trump and Biden share some of the same protectionist instincts, especially when it comes to old-fashioned, hard-hat industries. Vice President Harris had also come out against the sale in the weeks leading up to the November election. Of course, US Steel is headquartered in the politically important state of Pennsylvania, which may have carried some weight. And the steelworkers union had come out strongly against this deal. International union President David McCall was not mollified that Japan is a key U.S. ally. He warned that Nippon Steel could use this sale to dump cheaper Japanese steel into the U.S. market.
(SOUNDBITE OF ARCHIVED RECORDING)
DAVID MCCALL: We're not allies in terms of trade. They have, over the years, dumped material in this country, and they're really exporting their unemployment to the U.S., which causes our unemployment.
HORSLEY: Nippon Steel had offered all kinds of assurances about maintaining U.S. production, but those fell flat. This is an extraordinary move by the president, using a power that is rarely invoked. We've only seen this happen eight times in the past. Even the intergovernment agency committee that monitors foreign investment in the U.S. could not agree that this takeover represented a real threat to national security. Committee members deadlocked just before Christmas and left this decision up to the president himself.
FADEL: OK, so what happens now?
HORSLEY: Well, Nippon Steel had promised to invest nearly $3 billion to modernize US Steel blast furnaces in Pennsylvania and Indiana. Without this deal, US Steel says it won't have the money to make those investments and may instead shift its focus to nonunion steel plants in places like Arkansas. If so, that could jeopardize thousands of union jobs, and some industry observers say that's not an idle threat. It's why some steelworkers actually broke with their union and came out in support of this deal - this sale. US Steel even threatened to move its headquarters out of Pittsburgh. The company's stock fell more than 7% in the first half hour of trading this morning.
More broadly, we've also heard some business groups warning about what this might mean for overall foreign investment in the United States. You know, nearly 8 million Americans work for companies that are foreign-owned. Many of those are the kind of high-paying manufacturing jobs both Biden and Trump say they want to encourage. Foreign investors may look at this action today, though, and wonder just how welcome they are in the United States and possibly take their money and those jobs elsewhere.
FADEL: NPR's Scott Horsley. Thank you, Scott.
HORSLEY: You're welcome. Transcript provided by NPR, Copyright NPR.
NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.
