The US president's comments come as he seeks to build support in the key state of Pennsylvania.
US President Joe Biden has opposed a Pittsburgh-based steelmaker's proposed sale to Japan's largest steel producer, insisting on the need for “strong American steel companies powered by American steelworkers.” .
Biden's opposition to Nippon Steel's acquisition of US Steel comes as the Democrat seeks to shore up support among unions and blue-collar workers in the key state of Pennsylvania ahead of November's presidential election.
Biden won Pennsylvania by fewer than 100,000 votes in 2020, after former President Donald Trump in 2016 became the first Republican to win the state since 1988.
Trump said earlier this year that he would block the deal, describing the proposed takeover of the American brand as “a horrible thing.”
“I told our steelworkers I had their back, and I meant it,” Biden said in a statement Thursday.
“US Steel has been an iconic American steel company for more than a century, and it is vital that it remains a domestically owned and operated American steel company.”
Shares of US Steel fell 6.4 percent following Biden's comments, after sinking the day before on news that the president would voice opposition to the deal.
US Steel, the second largest steel producer in the United States, announced in December that it had agreed to be bought by Nippon Steel in a $14.1 billion acquisition.
The announcement sparked mixed reactions in the United States, with some welcoming the prospect of an injection of new capital and technology and others decrying the sale of an iconic American brand.
The proposed acquisition is currently under review by the Treasury Department's Committee on Foreign Investment in the United States (CFIUS), which is supposed to make decisions without taking into account political considerations.
While Biden did not explicitly say Thursday that he would block the deal, he has influence over CFIUS since the Treasury secretary, who heads the committee, works at the president's discretion.
United Steelworkers International, the largest industrial union in the United States, welcomed Biden's comments.
“Allowing a foreign-owned corporation to purchase one of our nation's largest steel manufacturers leaves us vulnerable when it comes to meeting our defense and critical infrastructure needs,” USW International President David McCall said in a statement. .
“The president's remarks should end the debate: US Steel must remain 'domestically owned and operated'.”
The U.S. Chamber of Commerce criticized “attempts to politicize” the CFIUS review process.
“That review will surely support the transaction, given Japan's status as one of the United States' most important and trusted allies,” U.S. Chamber of Commerce Senior Vice President John Murphy said in a statement.
“Japanese investment in the United States supports nearly one million American jobs, and officials must be careful not to send a chilling signal to international companies that U.S. policy may jeopardize their job-creating investments in the United States. For these reasons, it is imperative that the CFIUS review be conducted; and if, as expected, it does not reveal national security concerns, the sale should continue.”
Biden's intervention risks upsetting Tokyo, one of Washington's closest allies in Asia, as his administration seeks to bolster joint efforts to counter China.
Japanese Prime Minister Fumio Kishida will visit the White House on April 10 for talks that are expected to focus largely on strengthening the U.S.-Japan alliance in the face of Beijing's growing assertiveness.
