Nippon Steel and U.S. Steel have filed a federal lawsuit challenging President Biden’s decision to block their nearly $15 billion merger. Filed Monday in the U.S. Court of Appeals for the District of Columbia, the suit claims the decision was politically motivated and violated their due process rights. The companies contend they acted in good faith throughout the process, emphasizing the deal’s benefits to U.S. national security, including revitalizing American steel communities, strengthening the domestic supply chain, and bolstering competitiveness against China. They highlight Nippon Steel’s commitment to invest $2.7 billion in U.S. Steel’s operations in Gary, Indiana, and Pennsylvania’s Mon Valley, and its pledge not to reduce U.S. production capacity for a decade without government approval.
President Biden’s Friday decision to halt the merger followed a deadlock within the Committee on Foreign Investment in the United States (CFIUS) regarding national security risks. He cited the need for a “strong domestically owned and operated steel industry” as an essential national security priority. This marks the first time a U.S. president has blocked a merger between a U.S. and Japanese company. The timing is particularly noteworthy, given President Biden’s impending departure from office in a few weeks.
Simultaneously, a separate lawsuit was filed in the U.S. District Court for the Western District of Pennsylvania. This suit accuses steel competitor Cleveland-Cliffs Inc., its CEO Lourenco Goncalves, and U.S. Steelworkers union head David McCall of anticompetitive and racketeering activities aimed at preventing the Nippon Steel acquisition. The plaintiffs allege a coordinated effort to block any acquisition of U.S. Steel besides Cleveland-Cliffs’ previous, unsuccessful $7 billion bid in 2023. They claim Goncalves, in concert with the union, actively worked to undermine U.S. Steel’s ability to compete.
Adding further complexity, the incoming administration has also pledged to block the deal. President-elect Donald Trump has reiterated his intention to prevent the merger, promising to utilize tax incentives and tariffs to bolster the American steel industry. His consistent opposition, voiced both during the campaign and recently on Truth Social, underscores the intense political pressure surrounding this high-profile transaction.