US Steel, Nippon Sue US Government, Accusing Biden of “Political Interference” in Merger Block
US Steel and Nippon Steel have launched a legal challenge against the US government, filing a lawsuit on Monday accusing President Joe Biden of blocking their $14.3 billion merger for “purely political reasons,” CNN reports.
The move comes after President Biden issued an executive order last week effectively halting the deal.
In a joint statement, the companies declared their “continued commitment to completing the transaction – despite political interference,” arguing that the President’s decision was a “clear violation of due process.” They further claimed that Biden had “ignored the rule of law to gain favor with … (the United Steelworkers union) and support his political agenda.”
The lawsuit is not entirely unexpected, as the companies had previously vowed to “take all appropriate action to protect our legal rights” immediately following the President’s order.
Separate Lawsuit Targets Rival Steelmaker, Union
In a second, separate lawsuit, US Steel and Nippon are targeting Lourenco Goncalves, CEO of rival steelmaker Cleveland-Cliffs, and Dave McCall, president of the United Steelworkers union (USW). The companies allege that their actions to block the deal were “anticompetitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring US Steel.” The lawsuit accuses them of trying to “monopolize critical domestic steel markets” and seeks “substantial monetary damages.”
USW President McCall has responded by denouncing the lawsuit, stating that the union will “vigorously defend against these baseless allegations.” Neither the White House nor Cleveland-Cliffs have released statements regarding the new suits. The Treasury Department, which had reviewed the merger, declined to comment.
Background of the Bitter Battle for US Steel
The battle for control of US Steel began in August 2023, when the company announced it was evaluating multiple acquisition offers, including one from Cleveland-Cliffs. Although the Cleveland-Cliffs offer was valued at around $7.3 billion, approximately half the amount Nippon offered in December 2024, the company had the support of the USW, given that it is a unionized steel producer.
US Steel has warned that without the investment promised by Nippon, it might be forced to close some older, union-represented mills. Cleveland-Cliffs then indicated it was prepared to buy these mills, deepening the competition for US Steel.
The proposed merger has met with widespread opposition from both political parties. Vice President-elect JD Vance has voiced his concerns, and President-elect Donald Trump has also vowed to block the deal if it is still in play when he takes office.
US Steel, once a towering symbol of American industrial strength and the world’s first billion-dollar company, has faced decades of decline. Though no longer the largest US steel producer, the company employs 14,000 workers in the U.S. (11,000 of whom are union members), and supports approximately 18,000 retirees and beneficiaries. The company’s historical significance adds extra weight to the political debate.
Concerns about Impact on Foreign Investment
Some experts worry that the President’s actions could discourage foreign investment in other US industries. There are also concerns that blocking the merger could harm US Steel’s competitiveness.
The Committee for Foreign Investment in the United States (CFIUS) had not reached a consensus on whether the merger posed a national security risk, leaving the decision to President Biden. US Steel and Nippon believe the President’s move was purely for political gain, “a clear violation of the entire CFIUS process, which was created as an apolitical safeguard to protect national security.”
