Nippon Steel and U.S. Steel have filed lawsuits challenging President Biden’s decision to block Nippon’s proposed $15 billion acquisition of the Pittsburgh-based steelmaker, according to the Associated Press. The companies allege the decision was politically motivated, lacked a rational legal basis, and was influenced by rival Cleveland-Cliffs Inc. and United Steelworkers leadership.
Biden justified the move as a national security measure, emphasizing the importance of a strong, domestically owned steel industry. Nippon had pledged to invest $2.7 billion in U.S. Steel’s aging facilities and maintain production capacity for at least a decade. This marks the first time a U.S. president has blocked a merger between American and Japanese firms.
In a separate lawsuit, Nippon and U.S. Steel accuse Cleveland-Cliffs CEO Lourenco Goncalves and United Steelworkers President David McCall of anti-competitive actions to prevent any bidder other than Cleveland-Cliffs from acquiring U.S. Steel. McCall dismissed the claims as baseless, saying Biden’s decision protects U.S. interests and the domestic steel industry.
Nippon and U.S. Steel allege that the Committee on Foreign Investment in the U.S. (CFIUS) was manipulated to support Biden’s decision and that their national security proposals were ignored. The lawsuit also accuses Biden of using “undue influence” to further his political agenda.
The incoming administration, led by President-elect Donald Trump, has also signaled its intent to block the deal. Trump pledged to use tariffs and tax incentives to bolster U.S. Steel’s profitability, describing the company as central to restoring American industrial strength.
U.S. Steel shares rose over 4% following the lawsuits’ filing.
