WASHINGTON >> President Joe Biden blocked the $14 billion takeover of U.S. Steel by Nippon Steel of Japan in an announcement Friday based on grounds that the sale posed a threat to national security.

The decision was an extraordinary use of executive power, particularly for a president who is just weeks from leaving office. It is also a departure from America’s long-established culture of open investment, one that could have wide-ranging implications for the U.S. economy. Although the politics of the move were clear, Biden emphasized that he was acting to protect national security.

“It is my solemn responsibility as president to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad,” Biden said in a statement Friday morning. “And it is a fulfillment of that responsibility to block foreign ownership of this vital American company.”

Biden’s move to stop the transaction could cause foreign investors to rethink the wisdom of acquiring American firms in sensitive industries that are based in politically important states. It could also roil relations with Japan, a close ally of the United States and one of America’s largest sources of foreign investment.

The president’s decision to block the deal came after a federal committee reviewing the transaction opted to not make a formal recommendation about whether the takeover should be allowed to proceed, according to letters sent to the companies and the White House last month.

The Committee of Foreign Investment in the United States, which is made up of agencies including the departments of Treasury and Justice, expressed reservations about the deal to the companies in a letter last month. CFIUS (pronounced SIFF-ee-yuhs) voiced concerns that the transaction could pose a national security threat to the United States by potentially leading to a decline in American steel production. The officials suggested that Nippon’s other global business considerations could in the future outweigh its pledges to invest in U.S. Steel.

The lack of a formal recommendation cleared the way for Biden, barring an unexpected change of heart, to end a transaction that became ensnared in election-year politics.

“As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains,” Biden said, pointing to the concerns that the committee highlighted.

His decision could face challenges in court. Nippon has indicated that it was prepared to take legal action if the deal was blocked.

Nippon sent a letter to CFIUS last month that accused the White House of “impermissible influence” in the process. Nippon said the concerns raised by CFIUS were “littered with factual inaccuracies and omissions, misleading and incomplete statements, conjecture and hypotheticals that have no basis in fact and are plainly illogical.”

In a statement Friday, Nippon assailed Biden’s decision and said it was “left with no choice but to take all appropriate action to protect our legal rights.”

U.S. Steel has also continued to push for the deal. After CFIUS failed to make a formal recommendation, the company issued a statement saying that the deal “is the best way, by far, to ensure that U.S. Steel, including its employees, communities and customers, will thrive well into the future.”

The politics of Biden’s decision were clear: U.S. Steel is based in the crucial swing state of Pennsylvania, and its powerful union vehemently opposed the proposed takeover, in part over concerns that Nippon would not honor its commitments to invest in plants and preserve the pensions of workers. The public debate over the acquisition emerged as a key issue before the 2024 presidential election, and Biden, Vice President Kamala Harris and President-elect Donald Trump all publicly said that U.S. Steel should remain American-owned.

The union Friday praised Biden’s move.

“We’re grateful for President Biden’s willingness to take bold action to maintain a strong domestic steel industry and for his lifelong commitment to American workers,” said David McCall, president of United Steelworkers International.

Before the election, the Biden administration granted the companies an additional three months to try to address concerns about the deal. By December, however, it was clear that the deal was most likely doomed when CFIUS told Nippon that federal agencies were divided over whether it should proceed and after Trump declared that he would block it upon taking office.

U.S. Steel, which was founded in 1901, has for years faced financial struggles amid the changing dynamics of global metal markets and rapidly evolving technology, which the company was often slow to adopt. The company, whose metal has been used to build some of the nation’s most famous bridges and buildings — such as the Willis Tower in Chicago and the United Nations building in New York — employed 340,000 workers at its peak in the 1940s but now has around 20,000 workers overall, with about 4,000 in Pennsylvania.

A postpandemic boost to the steel market, which stemmed from a combination of shortages and demand spurred by federal infrastructure investments, had been showing signs of cooling amid worries of a global economic slowdown. In 2023, a U.S. Steel rival, Ohio-based Cleveland-Cliffs, made an unsolicited offer to buy its competitor. That set off a bidding war that Nippon won.

As the fourth-largest steelmaker in the world, Nippon saw an opportunity to grow even larger and gain access to the American market with the purchase of U.S. Steel. With large federal investments in infrastructure and climate technology in the works, the United States has been viewed as a growth market where steel demand will rise over the coming years.

But the United Steelworkers union quickly came out against the agreement. The union claimed to have been blindsided by the company’s management and argued that Nippon was unlikely to honor the union’s contracts and protect worker pensions. Nippon has said that it will honor existing contract commitments.

The fate of the company remains uncertain, and efforts to preserve its American roots could end up harming workers in Pennsylvania in the long run. U.S. Steel’s stock has stumbled in recent months as the prospects of a deal appeared to falter and dropped Friday.

Nippon had pledged to keep the company’s headquarters in Pittsburgh and invest in upgrading mills in the state. U.S. Steel executives have warned that without Nippon, it might have to lay off workers, relocate the headquarters and invest in mills that it has been building in the South. The company received several additional takeover offers, and it remains possible that one could be revived.

Gov. Josh Shapiro of Pennsylvania urged U.S. Steel on Friday to honor its commitments to its workers and expressed concern for them.

“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.