A worker leaves U.S. Steel Edgar Thomson Steel Works, March 10, 2018 in Braddock, Pennsylvania. (Photo by Drew Angerer/Getty Images)
U.S. Steel and Nippon Steel on Monday filed a lawsuit against the U.S. government over President Joe Biden’s order blocking the sale of the Pittsburgh-based steel company to the Japanese firm.
The lawsuit filed in the U.S. Court of Appeals in Washington, D.C. asks the court to set aside the review process of the Committee on Foreign Investment in the U.S. (CFIUS) and Biden’s order blocking the deal over security concerns.
In a joint statement the companies accused Biden and the government of violating due process and playing politics, claiming the president “ignored the rule of law to gain favor” with the United Steelworkers union (USW), which had opposed the sale.
“As a result of President Biden’s undue influence to advance his political agenda, the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”) failed to conduct a good faith, national security-focused regulatory review process, depriving Nippon Steel and U. S. Steel of their rightful opportunity for fair consideration of the Transaction,” the statement reads.
Biden had long expressed his opposition to the deal, saying U.S. Steel should remain a domestically owned and operated company. The White House in December called for “serious scrutiny” of the $14.9 billion deal. President-elect Donald Trump has also said he would block the deal.
“We need major U.S. companies representing the major share of US steelmaking capacity to keep leading the fight on behalf of America’s national interests,” Biden said in a Friday statement. “As a committee of national security and trade experts across the executive branch determined, this acquisition would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”
The companies argue the president’s early comments about the proposed deal, first announced in December 2023, unduly influenced the CFIUS review. They are asking CFIUS to conduct a new review of the deal.
Also on Monday, U.S. Steel and Nippon filed a motion for a preliminary injunction in U.S. District Court in Western Pennsylvania, accusing the CEO of rival steelmaker Cleveland Cliffs Lourenco Goncalves and USW President David McCall “for engaging in a coordinated series of anticompetitive and racketeering activities illegally designed to prevent any party other than Cliffs from acquiring U. S. Steel as part of an illegal campaign to monopolize critical domestic steel markets.”
Cleveland-Cliffs and USW did not immediately reply to requests for comment on Monday.
Reuters reported on Sunday that Goncalves had cast doubt on the deal several times during calls with investors. Cleveland-Cliffs made a failed bid to acquire U.S. Steel in August 2023.
This is a developing story