Nippon Steel's 14-billion-dollar bid to buy US Steel has been blocked by US President Joe Biden. The president cited concerns the deal could threaten US national security. Sources say Nippon Steel will take legal action in the US against the decision.

Biden released a statement on Friday saying the two firms should drop the planned acquisition within 30 days.

He says there is credible evidence to believe Nippon Steel might take action that threatens to impair the national security of the United States.

The Committee on Foreign Investment in the United States had reviewed the planned buyout for possible effects on national security, then referred it to the president for a decision.
The two steelmakers said in a joint statement that they were dismayed by Biden's decision.

They said that Biden's order violates due process and the law governing the Committee on Foreign Investment in the United States. They also said it is shocking and deeply troubling that the US government would treat an ally like Japan this way.

The steelmakers go on to say that Washington is sending a chilling message to any company based in a U.S. allied country contemplating significant investment in the Unites States.

US Steel President and CEO David Burritt called Biden's action "shameful and corrupt." He added the president had insulted Japan, a vital economic and national security ally, and put American competitiveness at risk.

But the leader of the United Steelworkers union, David McCall, welcomed the decision, saying the union has no doubt it is the right move for its members and national security.

Nippon Steel could have to pay a breakup fee of 565 million dollars to US Steel if the deal does not go through. It would also be forced to reassess its strategy in the US market where demand is expected to remain stable.