Biden Blocks Nippon Steel Deal: The Uncertain Future of U.S. Steel and Granite City Works

Driving through the streets of Granite City, Illinois, you might notice that the city appears a bit worn down. This is largely due to the presence of the steel mill, Granite City Works, which is part of U.S. Steel, and SunCoke Energy, a separate entity, both of which involve demanding and gritty work environments. However, despite their rugged nature, and the fact that driving past these facilities is quite a bit of an eyesore, these operations play a crucial role in holding the community together.

Without these industries, Granite City might risk becoming a ghost town.

It's no secret that U.S. Steel has faced several financial challenges, putting Granite City Works in jeopardy. Even as negotiations with Nippon Steel to acquire U.S. Steel for an estimated $14.9 billion were underway, Nippon pledged to enhance steel mills in Gary, Indiana and Pittsburgh. However, they remained silent about their plans for Granite City.

In 2023, the plant had to shut down its only operational blast furnace, resulting in layoffs. Additionally, there have been other temporary layoffs and shutdowns, leaving unions frustrated and workers uncertain about their job security. 

These jobs are well-paying, with the average worker earning around $75,000 a year, and certainly these are important, family supporting wages. That's something any community wants to keep around. At one time, about 900 people were employed there. But recent cuts in production and layoffs have reduced that number to around 300.

Typically, if there's an opportunity for new leadership to bring in innovative ideas and operational efficiencies, potentially increasing profitability and securing jobs, people would support the sale. However, steel is different. It's a critical resource for national security, making it understandable that selling to a foreign company could pose certain risks.

Even the unions preferred the initial offer from American based Cleveland Cliffs over Nippon Steel's, despite it being half of what Nippon ultimately offered. This was true even while Cleveland Cliffs never provided details about its plans for any of the U.S. Steel mills involved in the transaction.

President Joe Biden ultimately blocked the deal, and incoming President-Elect Donald Trump likely would have done the same, as he said as much on the campaign trail. Personally, I support the decision for the same reasons they cited.

National security.

The question becomes, are we in a damned if we do, damned if we don't situation? U.S. Steel continues to face financial difficulties, and regardless of the outcome of the Nippon Steel deal, the company will still need to make decisions in its best interest. This means that even if we prioritize national security interests, it doesn't guarantee that the workers at Granite City Works will be better off with a sale to either Cleveland Cliffs or Nippon Steel.

Moreover, if U.S. Steel cannot fix its problems, mills will potentially have to be closed anyway, or even the entire company could cease to exist—defeating the purpose of blocking the Nippon Steel deal anyway for national security interests to protect a valuable commodity. 

This raises the question, should the federal government step in and offer assistance, similar to the bailout provided to automakers? Unlike the financial issues faced by automakers, if the government's decision to block the deal creates additional hardships for the company, does it have an obligation to provide some support?

It's reminiscent of the Covid shutdowns mandated by governors and mayors. If the government decides to close business' doors, regardless of the reasons or the societal impact, offering relief seems like a reasonable thing to do. These businesses did not make decisions to close on their own. They were forced to operate under government directives rather than according to their best interests, and unable to make decisions on their own how to operate within the environment they were in.

While I generally do not support government intervention, I believe a case can be made for a situation like the one regarding U.S. Steel. If the goal is to protect an essential commodity, then we must take steps to also ensure its protection.

Moreover, amid all this uncertainty, I think the workers of Granite City Works, and all of U.S. Steel's mills, deserve some clarity about their futures. The people of Granite City also deserve transparency, as decisions made could have long-lasting impacts on their community. High paying jobs like those at Granite City Works are crucial—they are part of the glue that keeps the city whole.

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© 2025 Jim Bauer

American Manufacturing Is About More Than Just Jobs
Bringing back American manufacturing is critical to American society in more ways than just economic ones. In order for America to succeed it needs the ability to make things, not only for the stability and good jobs it provides, but for national security as well.