U.S. Steel and the Japanese firm that had sought to acquire it are suing the Biden administration after the president announced he was blocking a proposed deal for the iconic American manufacturer.
U.S. Steel and Japan’s Nippon Steel said in a release Monday that President Joe Biden ‘ignored the rule of law’ to gain favor with United Steelworkers, the union representing many of U.S. Steel’s employees, when he announced Friday he would not allow the acquisition to go through.
Separately, U.S. Steel and Nippon said they were also suing the president of the union, David McCall, as well as the head of an Ohio-based rival mining firm, Cleveland-Cliffs, accusing them of illegally coordinating to undermine the transaction.
Nippon Steel had proposed a $14 billion deal to buy U.S. Steel, but the agreement, which U.S. Steel executives favored, became mired in a national security review by a Treasury Department committee that assesses foreign ownership proposals.
Ultimately, the committee failed to agree on whether Nippon ownership posed a security risk, and it asked Biden for a final decision. In announcing his veto of the deal, Biden said shifting the firm out of American hands would undermine critical supply chains and put jobs at risk.
The Treasury committee, Treasury Secretary Janet Yellen and Attorney General Merrick Garland are also named in the suit.
“A committee of national security and trade experts determined this acquisition would create risk for American national security,’ a Biden administration spokesperson said in an emailed statement. ‘President Biden will never hesitate to protect the security of this nation, its infrastructure, and the resilience of its supply chains.’
McCall, the steelworkers union boss, said in a statement that he was reviewing the suit.
‘By blocking Nippon Steel’s attempt to acquire U.S. Steel, the Biden administration protected vital U.S. interests, safeguarded our national security and helped preserve a domestic steel industry that underpins our country’s critical supply chains,’ he said.
Lourenco Goncalves, the president, chairman and CEO of Cleveland-Cliffs, accused U.S. Steel and Nippon Steel of trying to ‘play the blame game.’
‘Today’s lawsuits against the U.S. Government, the USW, and Cleveland-Cliffs represent a shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster,’ Goncalves said in a statement.
‘Cleveland-Cliffs and the USW were not the only ones who recognized the adverse national security implications of this acquisition. This deal drew instant bi-partisan opposition, including from President Trump, who has vowed multiple times that he would block the deal,’ Goncalves added.
After the suits were announced Monday, President-elect Donald Trump, who had expressed opposition to the deal while he was campaigning last year, posted on his Truth Social platform: “Why would they want to sell U.S. Steel now when Tariffs will make it a much more profitable and valuable company. Wouldn’t it be nice to have U.S. Steel, once the greatest company in the World, lead the charge toward greatness again? It can all happen very quickly!”