US President Joe Biden has formally blocked the takeover of US Steel by a larger Japanese company, saying foreign ownership could pose national security risks.
The controversial decision comes a year after Nippon Steel first announced the $14.9bn (£12bn) deal, describing it as a lifeline for its smaller Pennsylvania-based rival.
But the deal quickly ran into political problems, after leaders of the United Steelworkers union vocally opposed the deal, creating political pressure in a key state during the 2024 presidential election.
Biden decided to cancel the agreement despite concerns from some advisers that it might harm Washington's relations with Tokyo, a key ally.
BBC News contacted Nippon Steel And US steel for suspension.
Nippon Steel has previously denied that it plans to cut production or cut jobs, while US Steel has warned that it may be forced to close its plants without the investment that would come with a new owner.
Some local workers and politicians have echoed these concerns.
Other business groups said they feared rejecting the deal would cool the international investment climate in the United States.
But Biden has long expressed his opposition to the agreement. The deal has also been criticized by President-elect Donald Trump and incoming Vice President J.D. Vance.
A US government panel charged with reviewing the deal for national security risks failed to reach consensus by late December, leaving the decision to Biden, who was required to act within a 15-day deadline.
Maintaining American ownership is important to keep the American steel industry and its supply chains strong, he said in his announcement Friday.
“As I have said many times, steel production — and the steelworkers who produce it — are the backbone of our nation,” he said.
“That's because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steelworkers, our nation becomes less strong and less safe.”
Nippon Steel and US Steel have previously suggested they may take legal action against the government if the deal does not go through.
Professor Stephen Nagy, from the Department of International Political Studies at the International Christian University in Tokyo, said that this is a “political” decision, noting that the Biden administration from its beginning promised a “foreign policy for the middle class.”
“This was a direct response and continuation of Trump’s MAGA agenda to Make America Great Again,” he said.
He added: “The Biden administration cannot appear weak before foreign companies, whether allies or adversaries.”
