Biden, Kamala, and Trump Are on the Same Page—And It’s Bad News for U.S. Steel’s $14.9B Merger

Looks like President Biden is finally peeling himself off his Rhode Island beach chair to do some presidential work—yep, time to stop eating mint chocolate chip ice cream and start blocking billion-dollar deals (calm down, it’s just a joke). 

Word on the street is ol’ Joe’s about to flex his veto muscles and block Nippon Steel’s $14.9 billion takeover of U.S. Steel. And no, this isn’t some shady, back-alley handshake deal. The Committee on Foreign Investment in the U.S. (CFIUS) has been side-eyeing this thing for months, and now it seems like Biden’s gearing up to slam the door shut. Naturally, U.S. Steel’s stock is reacting like it just saw Freddy Krueger—down 18% as of now.

For context, Nippon Steel isn’t some rinky-dink operation. We’re talking about a Japanese steel behemoth with pockets so deep they could probably lose a billion dollars and not even blink. Their proposed $14.9 billion offer was set to scoop up the third-largest steel producer in the U.S., an acquisition that had been blessed by U.S. Steel’s shareholders back in April 2024. Everyone was ready to party. Shareholders were happy, and U.S. Steel was looking forward to the billions in promised investments that would modernize its older plants.

U.S. Steel’s CEO, David Burritt, has been all-in on this deal, and can you blame him? Nippon was ready to drop $3 billion to give the company’s creaky Pittsburgh plants a much-needed facelift. Without that cash, Burritt’s been waving the red flag—talking about potential plant closures, layoffs, and maybe even pulling U.S. Steel’s headquarters out of Pittsburgh altogether. That’s right, Pittsburgh without U.S. Steel? That’s like New York without pizza. A crime against humanity.

(Source: Fox Business)

So, why all the fuss? Well, it turns out there’s bipartisan opposition to this deal. Yep, in a rare moment of unity, both Democrats and Republicans are lining up to oppose the sale. Stop pinching yourself. It’s not a dream, this is real. 

Biden’s camp is pushing the idea that U.S. Steel should stay, well, “American,” especially given the geopolitical tensions these days. I mean, who wouldn’t want to keep such a valuable steel company in domestic hands during times when the world feels like one big game of Risk?

Vice President Kamala Harris, not to be outdone, threw her two cents in, saying that U.S. Steel should stay American-owned and operated. Even former President Donald Trump has expressed his opposition, proving that if there’s one thing people on opposite ends of the political spectrum can agree on, it’s steel.

And just in case you thought this was all just political rhetoric, the United Steelworkers union is also against the sale. That’s right—the folks working the mills don’t want the deal to go through either. Talk about a full-court press. 

Now, U.S. Steel is stuck in limbo, without Nippon’s billions to modernize its creaky plants. They churn out 13.8 million tons of steel annually, but that’s peanuts compared to global players like ArcelorMittal with its 58 million tons. If U.S. Steel can’t get the cash to compete, they’ll be left in the dust.

(Source: New York Times)

And it’s not just them—the entire steel sector is feeling the heat, down over 15% this year. U.S. Steel is getting hit the hardest, with its stock down a brutal 38% year-to-date, including today’s 18% plunge. Things aren’t looking good for U.S. manufacturing, and this could be just the beginning.

With that said though, let’s be real here, shall we?

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Stock.News does not have positions in companies mentioned.