U.S. Steel and the Nippon Steel Corporation filed a federal lawsuit Monday morning against the Biden Administration claiming the President’s blockage of their $14.9 billion sale was “politically motivated.”
President Joe Biden announced last week he had blocked the sale of U.S. Steel to Japan’s Nippon Steel “to protect the nation’s security, infrastructure and critical supply chain.”
The lawsuit, claiming Biden’s decision lacked any legal foundation, was filed in the U.S. Court of Appeals for the District of Columbia.
In a formal statement, U.S. Steel and Nippon officials stated, "As a result of President Biden's undue influence to advance his political agenda, the Committee on Foreign Investment in the United States failed to conduct a good faith, national security-focused regulatory review process."
The two steel giants filed a second lawsuit in the U.S. District Court for the Western District of Pennsylvania against Lourenco Goncalves, CERO of rival steelmaker Cleveland-Cliffs and Dave McCall, president of the United Steelworkers union. The suit claimed both organizations took “racketeering activities” to block the sale. In 2023, Cleveland-Cliffs made a $7 billion bid to acquire U.S. Steel, but the offer was rejected.
“As I have said many times, steel production—and the steel workers who produce it—are the backbone of our nation,” Biden released in a statement early Friday morning. “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains. That is because steel powers our country: our infrastructure, our auto industry, and our defense industrial base. Without domestic steel production and domestic steel workers, our nation is less strong and less secure.
“For too long, U.S. steel companies have faced unfair trade practices as foreign companies have dumped steel on global markets at artificially low prices, leading to job losses and factory closures in America,” the President continued. “I have taken decisive action to level the playing field for American steelworkers and steel producers by tripling tariffs on steel imports from China. With record investments in manufacturing, more than 100 new steel and iron mills have opened since I took office, and U.S. companies are producing the cleanest steel in the world. Today, the domestic steel industry is the strongest it has been in years.
“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 continued. “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.
“So, that is why I am taking action to block this deal. It is my solemn responsibility as President to ensure that, now and long into the future, America has a strong domestically owned and operated steel industry that can continue to power our national sources of strength at home and abroad; and it is a fulfillment of that responsibility to block foreign ownership of this vital American company. U.S. Steel will remain a proud American company – one that’s American-owned, American-operated, by American union steelworkers – the best in the world.
“Today’s action reflects my unflinching commitment to utilize all authorities available to me as President to defend U.S. national security, including by ensuring that American companies continue to play a central role in sectors that are critical for our national security. As I have made clear since day one: I will never hesitate to act to protect the security of this nation and its infrastructure as well as the resilience of its supply chains.
On Dec. 23, U.S. Steel officials released a statement explaining the deal is “the best way, by far, to ensure that U.S. Steel, including its employees, communities, and customers, will thrive well into the future."
On Dec. 23, U.S. Steel officials released a statement explaining the deal is “the best way, by far, to ensure that U.S. Steel, including its employees, communities, and customers, will thrive well into the future."
In a letter to President Biden, sent Dec. 23, 20 mayors from cities in Pennsylvania and Indiana said, “Our communities in the Mon Valley of Pennsylvania as well as Gary, Indiana are made up of working-class American men and women whose identity and livelihood depend on the success of U. S. Steel. As such, they overwhelmingly support the vision and commitments that Nippon Steel has introduced to ensure that their jobs are protected and that their local facilities stay open. Nippon Steel does not just want to maintain the status quo – they want to make major investments that will return U. S. Steel to its former glory and share that success with their workers.”
The mayors further appealed, “The recent history of our communities has been marked by struggle and anxiety about what lies ahead, but from the strength of our people comes an optimism that together we can build a brighter future. Nippon Steel is offering them the lifeline they need to make that future a reality, and we cannot waste this opportunity because of politics or the irrational behavior of a single union leader. We respectfully urge you to listen to the voices of the steelworkers and everyone else whose economic security is tied to U. S. Steel – they are speaking loudly in unison that this deal must be approved.”
The Nippon Steel Corporation, had made numerous promises to the U.S. Steel workers and the local mayors. In one letter Takahiro Mori, vice chairman, stated, “We will invest no less than $2.7 billion in USW-represented facilities, including at least $1.4 billion toward capital investments in the existing BLA-covered facilities (including blast furnaces and coke facilities) through calendar year 2026, no less than $1 billion to replace and/or upgrade the existing Hot Strip Mill and other facilities at Mon Valley Works, and approximately $300 million to revamp blast furnace #14 at Gary Works.”
Nippon had also promised job security with no layoffs.
With regard to U.S. security, Mori had written, “Our partnership will enhance U.S. national security. We will bring the necessary capital and technological improvements to U. S. Steel so that it can produce stronger, cleaner, and more advanced steel for its customers in the U.S. It would reinforce American industry, domestic supply chain resiliency, and U.S. national security.
“We are committed to protecting American interests. We will protect U. S. Steel against unfair trade and will not interfere with U. S. Steel’s decisions on trade matters. U. S. Steel will remain headquartered in Pittsburgh under the control of a Board of Directors made up of a majority of American citizens, including three independent U.S. directors, and the key management team will also be made up of American citizens.”
U.S. Steel is the parent company of Big River Steel and BRS2 in Osceola.
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