Critics say that blocking the $15bn (€13.53bn) deal could risk thousands of jobs.
The White House is preparing to block the acquisition of US Steel by Nippon Steel, according to reports from the Washington Post and the Financial Times.
A White House official, insisting on anonymity, did not deny the report when speaking to the Post.
He said that President Biden still needs to receive the official recommendation from the Committee on Foreign Investment in the United States (CFIUS) – a review that could end as soon as this month.
Biden had already voiced his objections to the merger, backing his supporters in the United Steelworkers union who oppose the deal.
The objection carries weight as US Steel is headquartered in the swing state of Pennsylvania and is a symbol of Pittsburgh’s industrial might in an election year where Republicans and Democrats alike are promising more domestic manufacturing jobs.
Vice President Kamala Harris, the Democratic nominee, came out against the deal this week.
Former President Donald Trump, the Republican nominee, already said he would block the merger if he was still in the White House.
Stock in US Steel fell nearly 20% on the news that Biden could stop the merger.
The CFIUS review process generally relates to business issues with national security implications.
US Steel spokesperson Amanda Malkowski said that the company had not received any update on the process and that the firm sees “no national security issues associated with this transaction, as Japan is one of our most staunch allies”.
“We fully expect to pursue all possible options under the law to ensure this transaction, which is best future for Pennsylvania, American steelmaking, and all of our stakeholders, closes,” Malkowski said.
A spokesman representing Nippon Steel said the company had not received any updates from the federal government on the review process.
Tucker Elcock, who works for the advisory firm Teneo, said on behalf of Nippon Steel that it was the “only willing and able” company that could make an investment in US Steel that put the entire sector on a “stronger footing”.
He added that Nippon Steel “strongly believes that the US government should appropriately handle procedures on this matter in accordance with the law”.
US Steel on Wednesday hosted a rally in support of the acquisition.
It said in a statement that without the Nippon Steel deal the company would “largely pivot away from its blast furnace facilities, putting thousands of good-paying union jobs at risk, negatively impacting numerous communities across the locations where its facilities exist, and depriving the American steel industry of an opportunity to better compete on the global stage”.
Nippon Steel announced the $15 billion (€13.53bn) deal in December 2023 and US Steel shareholders approved it in April of this year.
