The Committee on Foreign Investment in the United States (CFIUS), which reviews foreign investments in the US for national security risks, referred the bid to Biden after it was unable to reach a consensus.
"We received the CFIUS evaluation and the President will review it," a White House spokesperson said.Â
United States Steel headquarters is located in downtown Pittsburgh. (AP PHOTO)
President-elect Donald Trump who takes office on January 20, has also opposed the deal, which was first announced last December.
Nippon Steel said on Tuesday it was informed of the CFIUS letter.
"We urge him (Biden) to reflect on the great lengths that we have gone to address any national security concerns that have been raised and the significant commitments we have made to grow US Steel," Nippon Steel said in a statement.
Nippon Steel and US Steel have previously said they planned to close the deal before the end of 2024.
The Washington Post first reported the referral to Biden on Monday.
CFIUS said on Monday that allowing Nippon Steel to take over US Steel could result in lower domestic steel production representing "a national security risk", according to the Washington Post.
Nippon Steel said it could eliminate that risk by appointing US citizens to top management and board of director positions at US Steel, but the committee was divided in its view of whether those remedies would be sufficient, said the newspaper.
The US Treasury Department, which leads CFIUS, and the Commerce Department, declined to comment.
The deal, essential for Nippon Steel's expansion globally, has also faced opposition from the United Steelworkers, a powerful labour union that was key for both Democrats and Republicans in the swing state of Pennsylvania during the November 5 presidential elections.
The union is concerned Nippon Steel may import steel into the US from its international mills, eroding a company that helped build the Empire State Building and armed allied forces in World War Two.
Nippon Steel has previously denied it will use the deal as cover to import steel and has made a series of pledges to protect jobs and invest in US facilities it sees as key to its future growth.
Nippon Steel faces a $US565 million ($A906 million) penalty to US Steel if the deal collapses, which would also be a major blow to the Japanese steelmaker's overseas expansion. It has earlier said it could pursue legal action against the US government if the deal falls apart.
With Japan being the largest foreign investor to the US, Japanese Prime Minister Shigeru Ishiba last month sent a letter to Biden asking him to approve Nippon Steel's acquisition of US Steel.
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