U.S. Steel and Nippon Steel have filed a lawsuit against President Joe Biden, claiming that his administration unlawfully blocked their $14.9 billion merger bid through a biased national security review process. The companies are seeking to have a federal appeals court overturn this decision, allowing them another opportunity for approval without political interference.
Key Highlights:
Allegations Against Biden:
The lawsuit asserts that Biden unfairly influenced the Committee on Foreign Investment in the U.S. (CFIUS), which evaluates foreign investments for national security risks.
The companies argue that Biden’s actions violated their right to a fair review, particularly as the merger became a contentious issue during the lead-up to the November presidential election.
Political Context:
Both Biden and President-elect Donald Trump publicly opposed the merger, emphasizing the importance of keeping U.S. Steel American-owned. This stance was particularly significant in Pennsylvania, where U.S. Steel is headquartered.
The United Steelworkers union, led by President David McCall, also opposed the merger.
Biden’s Motivation:
The lawsuit claims Biden aimed to “curry favor” with union leadership in Pennsylvania to bolster his reelection campaign.
Response from the White House:
A White House spokesperson defended the national security review, asserting that protecting the nation’s security and infrastructure is a priority for President Biden.
Nippon Steel’s Position:
Nippon Steel Vice Chair Takahiro Mori criticized the integrity of the CFIUS review process, stating that the company received no written feedback regarding the proposed national security agreement.
Mori emphasized the company’s commitment to fighting the decision, stating, “We can’t back down after being treated unreasonably.”
Legal Landscape:
The lawsuit also names U.S. Attorney General Merrick Garland and Treasury Secretary Janet Yellen, who oversees CFIUS. Legal experts note that courts typically defer to CFIUS regarding national security definitions, complicating the lawsuit’s prospects.
Trump’s Commentary:
In a social media post, Trump questioned the timing of the merger attempt, suggesting that tariffs would make U.S. Steel a more profitable entity.