Nippon Steel sues government after Biden admin blocks $15B deal to acquire U.S. Steel

01/09/2025 / By Arsenio Toledo

Nippon Steel filed a lawsuit against the U.S. government after President Joe Biden blocked its $14.9 billion acquisition of U.S. Steel, citing national security concerns.
Nippon Steel and U.S. Steel accused the Biden administration of manipulating the acquisition review process for political purposes, claiming that his decision lacked sufficient evidence and violated due process.
The dispute has raised concerns about U.S.-Japan relations, with Japanese officials warning of potential long-term impacts on the strategic alliance.
Nippon Steel and U.S. Steel filed a separate lawsuit accusing Cleveland-Cliffs and the United Steelworkers union of colluding to derail the deal, further complicating the legal and political landscape.

In an unprecedented move, Japan’s Nippon Steel has filed a lawsuit against the United States government after outgoing President Joe Biden blocked its $14.9 billion acquisition deal to take over the United States Steel Corporation, citing national security concerns.

The lawsuit, filed Monday, Jan. 6, in the U.S. Court of Appeals for the District of Columbia Circuit, marks the first time a Japanese company has challenged a U.S. president’s decision to halt a foreign acquisition under the Committee on Foreign Investment in the United States (CFIUS) review process. (Related: Nippon Steel acquires industrialization key player U.S. Steel in all-cash $14.9 billion deal.)

The legal battle underscores the growing tensions between economic interests and national security priorities, while raising questions about the politicization of foreign investments in the United States.

The controversy began in 2023 when Nippon Steel, the world’s fourth-largest steelmaker, announced its intention to acquire U.S. Steel, a storied American industrial giant. The deal, which was approved by U.S. Steel shareholders, quickly became a flashpoint in U.S. politics, drawing opposition from both Biden and the at-the-time former President Donald Trump, as well as fierce resistance from the powerful United Steelworkers union.

On Jan. 3, Biden invoked his authority under CFIUS to block the transaction, stating that the acquisition posed a risk to America’s steel supply and national security.

Nippon Steel and U.S. Steel responded with a joint statement, accusing the Biden administration of manipulating the CFIUS review process to advance a political agenda.

“The U.S. authorities’ review of our deal was manipulated to advance President Biden’s political agenda,” the companies said. “We will take all appropriate action to protect our legal rights.”

The lawsuit argues that Biden’s decision violated due process under the U.S. Constitution and the law governing CFIUS. The companies claim that the administration failed to provide sufficient evidence to justify the national security concerns and that the decision was politically motivated.

“We firmly believe that the various facts that will come to light through the litigation will demonstrate that this decision clearly violated the Constitution and laws,” Nippon Steel CEO Eiji Hashimoto said during a news conference.

The legal challenge is significant because CFIUS determinations and presidential decisions based on them are typically not subject to judicial review. However, the companies are banking on procedural arguments, including claims of due process violations, to overturn the decision. The lawsuit seeks to have the CFIUS review set aside and a new review conducted.

The dispute has also spilled over into broader geopolitical and economic concerns. Japanese officials, including Prime Minister Shigeru Ishiba, have expressed unease about the decision’s implications for U.S.-Japan relations.

“No matter how strong our alliance, this matter is critically important for the future of our relationship,” Ishiba said.

Cleveland-based steelmaker accused of conspiring to derail Nippon-U.S. Steel acquisition deal

Meanwhile, Nippon Steel and U.S. Steel have filed a separate lawsuit in the U.S. District Court for the Western District of Pennsylvania, accusing Ohio steel manufacturer Cleveland-Cliffs, its CEO Lourenco Goncalves and the United Steelworkers President David McCall of engaging in “illegal and coordinated actions” to derail the deal. The suit alleges that Cleveland-Cliffs, which had previously sought to acquire U.S. Steel, colluded with the union to block the transaction.

Cleveland-Cliffs has dismissed the allegations as baseless. In a statement released Monday, the company accused Nippon Steel and U.S. Steel of engaging in “legal theatrics.”

The case has drawn attention to the CFIUS process, which was established in 1975 to review foreign investments for national security risks. While the committee has blocked deals involving Chinese firms in the past, this is the first time a Japanese company has been targeted. The decision has sparked debate about whether the U.S. is sending mixed signals to its allies, particularly Japan, a key strategic partner in the Indo-Pacific region.

Watch this clip from Fox Business discussing the growing calls for President-elect Donald Trump to intervene and rule on the proposed deal to sell U.S. Steel.

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