Nippon and US Steel sue government over blocked deal

Nippon Steel and US Steel are suing the US government to stop the takeover, saying President Joe Biden “disregarded the law to benefit” labor unions.

The two companies also said that President Biden, who is entering the final weeks of his presidency, stopped Nippon Steel from buying US Steel in order to achieve his goals.

In rejecting the contract offered on FridayPresident Biden said a strong domestic steel industry is critical to national security and supply chains, including the auto and defense industries.

If the $14.9bn (£11.8bn) deal goes through it would create one of the largest steel companies in the world outside of China.

The takeover has been controversial since it was first announced in December 2023.

In another case, Nippon Steel and US Steel have asked the court to set aside the review process of the US Foreign Investment Committee, which has the power to monitor US companies that have taken over foreign countries, saying that it “failed to do good faith, national security-focused regulatory regulatory process”.

In addition, the companies are also suing the President of the United Steelworkers Union, David McCall, and the head of the steel company Cleveland-Cliffs, Lourenco Goncalves, for “unlawful and concerted actions aimed at stopping the work”.

On Friday, the United Steelworkers union said it had “no doubt” that stopping the strike was “the right thing to do for our members and the safety of our country”.

The deal accused Nippon of disrupting the U.S. steel industry for years through tactics that included dumping its products on the U.S. market.

Nippon Steel and US Steel said that they will “act in good faith with all parties” to show how the agreement “will help, not threaten, the national security of the United States” and how it will strengthen the American steel industry “against the threat of China”.

He reiterated that Nippon was ready to invest $2.7bn in Pittsburgh-based US Steel.

President-elect Donald Trump has said he will cancel the deal. On Monday, he posted on Truth Social: “Why would they want to sell US Steel now when the prices will make it a very profitable company?”

Earlier on Monday, Japanese Prime Minister Shigeru Ishiba expressed his concerns about the US decision to stop the seizure and how it would affect trade relations between the two G7 countries.

“Unfortunately, it is true that we have heard the concerns expressed by the Japanese industry about the future economic relationship between Japan and the US. We must see this issue as a serious matter,” said Mr. Ishiba.

He added that although it was not appropriate for his government to comment on individual companies: “We must insist on explaining why there are security concerns, otherwise there will be no progress in future negotiations.”