Nippon Steel Sues POTUS

Nippon Steel, Japan’s top steelmaker, announced that it filed a lawsuit against the President of the United States, Joe Biden, who issued an order to block Nippon Steel’s acquisition of United States Steel (USS), arguing that the president illegally intervened in the deal between those two steelmakers. Nippon Steel also sued Cleveland-Cliffs, the second largest steel producer in U.S., accusing its illegal activities to disrupt the deal. The top manager of Nippon Steel is insistent on finalizing the deal.

Nippon Steel announced its acquisition of USS in December 2023 as an agreed deal with USS. United Steelworkers (USW) immediately expressed its opposition to the deal, concerning negative impact on employment. It is undeniable that the steelworkers were crucial voters in the U.S. presidential election in 2024. Both campaigns of Kamala Harris and Donald Trump announced their opposition to acquisition of USS by Nippon Steel.

 

Although the Committee on Foreign Investments of the United States (CFIUS) did not reach a consensus on national security risks of the acquisition, the President Joe Biden announced his rejection on January 3rd, saying that the acquisition might be an “action that threatens to impair the national security of the United States.” “A strong domestically owned and operated steel industry represents an essential national security priority and is critical for resilient supply chains,” said Biden.

 

Nippon Steel and USS regarded Biden’s decision as a political action made in “clear violation of due process and the law.” They filed a lawsuit demanding the US Court of Appeals to overturn President Biden’s decision, seeking another opportunity to review the deal.

 

Both steelmakers argues that their deal will enhance US national security “by revitalizing communities that rely on American steel, bolstering the American steel supply chain, and strengthening America’s domestic steel industry against the threat from China,” in their joint statement.

 

“I cannot accept the decision, because it was made as an illegal political intervention by President Biden without proper examination of CFIUS,” said Eiji Hashimoto, the chairman of Nippon Steel in the press conference on January 7th. Hashimoto insisted on finalizing the acquisition, stressing that the deal would contribute to enhance national security of the United States.

 

Both companies filed the second lawsuit against Cleveland-Cliffs and the president of USW, David McCall, arguing that they tried to damage USS by disturbing the deal. Nikkei Shimbun reported that it was aimed at collecting evidence of connection between U.S. president and labor union. Nippon Steel suspects that Cleveland-Cliffs has committed organized defamation against the deal. It also doubts that Cleveland-Cliffs and USW 

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