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The Biden administration is reportedly set to block Nippon Steel's $14.9 billion acquisition of U.S. Steel after the Committee on Foreign Investment in the United States identified potential national security risks, including a decline in American steel production and the likelihood of less vigorous pursuit of trade cases to protect American steel mills and steelworker jobs.

“We commend President Biden and the U.S. government for its reported decision to block foreign ownership of U.S. Steel by Japan’s Nippon Steel. The American steel industry plays a crucial role in safeguarding our national security. President Biden’s courageous move affirms our view that our industry is best served by American companies that are committed to the long-term prosperity of domestic manufacturing, supported by good-paying union jobs, under American ownership," Cleveland-Cliffs Chairman, President and CEO Lourenco Goncalves said.

U.S. Steel responded by saying it may pursue legal action to salvage the merger and warned if the deal collapses it may shift away from integrated steelmaking at blast furnaces like those that line the lakeshore in Northwest Indiana.

The Pittsburgh-based steelmaker, which operates Gary Works and the Midwest Plant in Portage, Indiana, already idled steelmaking Granite City Works outside St. Louis in Illinois and at Great Lakes Works in Detroit as well as East Chicago Tin and tin-making operations at Gary Works while investing billions in new mini-mills in Arkansas that cost less to operate the integrated steel mills, require less capital to maintain and pay lower wages to non-union workers.

Cleveland-Cliffs, which has invested heavily in American steelmaking, particularly to serve the domestic auto industry, is poised to step in if U.S. Steel closes any more mills, Goncalves said.

“With the continued exclusive and unwavering support of the United Steelworkers union, and with ample financing support available from our bank group led by J.P. Morgan and Wells Fargo, Cleveland-Cliffs stands ready to immediately acquire and invest in any and all union-represented assets that U.S. Steel shuts down, protecting union jobs and investing in the future livelihoods and communities in which the facilities operate," Goncalves said.

U.S. Steel said it may continue to idle blast furnaces and focus more on mini-mill production in the future, warning it could even move its headquarters from its longtime location in Pittsburgh closer to its new manufacturing facilities in the South. The United Steelworkers union called the threats "reckless and baseless" and said it reinforced their fears that U.S. Steel plants could ultimately just end up serving as finishing lines for Japanese-made steel products, gutting domestic manufacturing while allowing Nippon Steel to sidestep tariffs.

"The last-minute threats by U.S. Steel to shut down integrated steelmaking production, fire union workers, and move their headquarters from Pittsburgh if their deal does not close is just a pathetic blackmail attempt on the United States government and the Commonwealth of Pennsylvania," Goncalves said. "By taking immediate action, our government is showing that this type of shameless behavior will never be tolerated.�