Nippon Steel and U.S. Steel have filed a federal lawsuit challenging the Biden administration's decision to block a proposed nearly $15 billion deal for Nippon to acquire Pittsburgh-based U.S. Steel. The lawsuit, filed in the U.S. Court of Appeals for the District of Columbia, alleges that the decision was political and violated the companies' due process.
The companies stated that the transaction would enhance United States national security by revitalizing communities dependent on American steel, strengthening the domestic steel industry, and securing the steel supply chain against threats from China. Nippon Steel had pledged a $2.7 billion investment in U.S. Steel's blast furnace operations in Indiana and Pennsylvania, with a commitment not to reduce U.S. production capacity without government approval for the next decade.
President Biden halted the takeover after federal regulators were deadlocked on approval, citing the importance of a domestically owned and operated steel industry for national security. The decision marked the first time a U.S. president blocked a merger between American and Japanese firms.
Following the failure of the Committee on Foreign Investment in the United States (CFIUS) to reach a consensus on national security risks, the companies accused Cleveland-Cliffs Inc. and its CEO, along with the U.S. Steelworkers union, of engaging in anticompetitive activities to thwart the deal.
The companies alleged that the review process was manipulated to support a predetermined decision by Biden, claiming undue political influence. Despite the legal challenges, Nippon faces an incoming administration that has also pledged to block the deal.
President-elect Donald Trump had previously expressed intentions to block the acquisition, emphasizing the use of tax incentives and tariffs to bolster the American steel industry. Trump's stance against the deal was reiterated during his presidential campaign and on his Truth Social platform in December.
