Why the blocked US Steel deal still matters to Pittsburgh’s future

Pittsburgh is looking to go back to steel powerhouse roots — despite the takeover of the tech economy coming its way.

President Joe Biden’s decision to block the $14.9 billion merger of Japanese-owned Nippon Steel Corporation and United States Steel Corporation marks a significant moment for Pittsburgh and the American manufacturing industry. 

In an executive order issued today, the president cited national security and the need to bolster domestic production as reasons for halting the deal, which had been under federal review for more than a year.

“US Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world,” Biden said in a statement.

For Pittsburgh, once the heart of America’s steel industry, the merger’s collapse underscores the region’s ongoing economic evolution. Steel jobs, once synonymous with stability and prosperity, have dwindled over the past half-century. 

Today, the robotics workforce outnumbers steelworkers in the region, a shift powered by federal investments like the $62.7 million Build Back Better grant funding the New Economy Collaborative. These efforts aim to reposition the region for the jobs of the future.

Yet, the legacy of steel looms large. US Steel, once the largest domestic company and a hallmark of American industrial might, is now worth roughly $7.3 billion, a valuation that puts it on par with national restaurant chain Texas Roadhouse. In contrast, Nippon Steel is valued at over $22 billion and ranks as the world’s fourth-largest steelmaker.

The deal faced criticism from labor leaders and political figures across the spectrum. United Steelworkers opposed the merger, citing concerns about job security and domestic production. Pennsylvania leaders, including Gov. Josh Shapiro, echoed those sentiments while emphasizing the need for alternative investments to secure the region’s future.

Blocking this merger reflects a broader strategy by the Biden administration to reinvest in American manufacturing. Critics, however, question whether initiatives like the Inflation Reduction Act and the bipartisan CHIPS and Science Act — both of which have channeled billions into reshoring manufacturing — are too little, too late.

“Choosing to walk down an uncertain path when a viable and highly beneficial deal is on the table is the wrong decision by the Biden Administration,” said Stefani Pashman, CEO of the Allegheny Conference on Community Development. 

The decline of US Steel mirrors a larger story of economic transformation. Once a cornerstone of industrial America, the company now symbolizes how automation and globalization reshaped Pittsburgh and similar cities. 

For decades, Washington promised globalization would make Americans richer, but in places like Pittsburgh, many feel they traded manufacturing jobs for cheaper TVs.

This framing misses a larger truth: Automation, not just trade, changed the American economy. 

Today, the Biden administration’s push to prioritize domestic production is an effort to rebalance those scales. Blocking the US Steel deal may not restore its former glory, but it seems to signal a commitment to securing what’s left of American manufacturing — a stance that President-elect Donald Trump has echoed as he prepares to take office.

A year of back-and-forth comes down to labor disputes and national security

The merger’s end comes after the Committee on Foreign Investment referred the final decision on the deal to the White House.

In a last-ditch effort to keep the deal alive, NSC proposed giving the US government veto power over any reductions to US Steel’s production capacity. Still, its efforts to sway the feds — including a proposed $1.3 billion investment in a local steel plant — went unheard after more than a year of trying. 

The process began in December 2023, when NSC announced a definitive agreement to purchase US Steel for $14.9 billion after a brief bidding war with entities like Cleveland-Cliffs and Nucor. 

The deal, the companies said, would benefit both by providing “immediate value for US Steel shareholders while enhancing NSC’s long-term growth prospects,” Takahiro Mori, NSC executive vice president, said at the time.

A possible merger inched forward throughout 2024. Despite overcoming some acquisition hurdles, NPC faced delays after the Department of Justice requested additional paperwork and put out a statement saying it did not intend to interfere with trade matters.

Under the agreement, US Steel would have kept its presence in Pittsburgh as a subsidiary of the Japanese steelmaker and honored its current union contracts, according to the companies. However, the impact on steelworkers quickly became a major talking point among the anti-merger crowd.

Previously, US Steel threatened to leave Pittsburgh, or at least downsize its presence, if the deal failed. Plus, United Steelworkers, the trade union representing some workers at US Steel, continuously came out against the proposal.

“Our union’s first and only concern has been the long-term viability of our facilities as we look to ensure a strong domestic steel industry well into the future,” President David McCall said today. “We now call on US Steel’s board of directors to take the necessary steps to allow it to further flourish and remain profitable.”

Economic development nonprofit the Allegheny Conference on Community Development, a vocal supporter of the deal, said in a December statement that the Nippon-US Steel deal was “critical” and “well-suited” for the region’s future.

“We are concerned there is no Plan B that proposes similar or greater value to our region,” Pashman said on behalf of the board.

In response to the president’s decision, Nippon Steel released a statement condemning the order. 

“The process was manipulated,” the company said. 

A politically doomed deal from the beginning

Few US political figures rooted for the deal from the get-go, though some steelworkers rallied behind it.

It came out in September that President Joe Biden was preparing to announce his plans to block the deal, after a Labor Day speech in Pittsburgh by Vice President Kamala Harris that commented on the topic. 

Republicans denounced the deal, too, from Trump to notable senators. Internationally, Japanese Prime Minister Fumio Kishida gave a noncommittal comment in 2023 saying he hoped “these discussions will unfold in directions that would be positive for both sides.”

In Allegheny County, locals grappled with what the major merger would mean for their community, and notable backlash came from Rep. Chris Deluzio, Rep. Summer Lee, Sens. Bob Casey and John Fetterman, Gov. Josh Shapiro and more.

Senator-elect Dave McCormick denounced the Nippon-US Steel merger on the campaign trail, too. It later came out that as CEO of Bridgewater Equity Fund, the hedge fund shorted US Steel stock to the tune of $6 million and heavily invested in NSC. Members of Pittsburgh’s city council considered formally opposing the merger but tabled the conversation in September. 

After the deal was blocked, Shapiro called on US Steel to uphold its commitments to the region, while leaving the door open for future bids.

“I also expect any other potential buyers to demonstrate the strong commitments to capital investment and protecting and growing Pennsylvania jobs that Nippon Steel placed on the table during my continued dialogue with their leadership,” he said.