Japan-based Nippon Steel and U.S. Steel have filed a lawsuit against the Joe Biden administration following the decision to block their proposed $15 billion merger. The lawsuit, filed on Monday, challenges the administration’s assertion that the merger would pose a threat to U.S. national security.
The Biden administration’s decision, announced last week, cited concerns that the acquisition of the second-largest domestic steel producer by a foreign entity could undermine national security. President Biden emphasized the importance of maintaining a strong, domestically owned steel industry to safeguard the nation’s interests.
In their lawsuit, U.S. Steel and Nippon Steel argue that the administration’s decision was politically motivated, influenced by promises made to the United Steelworkers (USW) labor union. The companies allege that the government review process was manipulated to achieve a predetermined outcome.
“Nippon Steel and US Steel have engaged in good faith with all parties to underscore how the Transaction will enhance, not threaten, United States national security”
Joint Statement from Nippon Steel & US Steel
The lawsuit also names Cleveland-Cliffs, another domestic steelmaker, and USW President David McCall, accusing them of illegally coordinating efforts to block the merger. Nippon Steel had committed to investing $2.7 billion in U.S. Steel’s ageing Blast Furnace in Indiana and Pennsylvania, which they claim would enhance, rather than threaten, U.S. national security.
This legal battle marks a critical moment in the ongoing debate over foreign investments in key U.S. industries and the balance between economic interests and the U.S. National security.