Biden's 'chilling' block of Nippon Steel deal to face legal challenge

Nippon Steel and US Steel strongly opposed US President Joe Biden's decision to block Nippon Steel's proposed acquisition of US Steel, and are posed to bring the decision to court.

Stating that Biden's objection "sends a chilling message to any company based in a US-allied country contemplating significant investment in the United States," the companies jointly vowed to take all appropriate action to protect their legal rights. Kyodo News reported on Saturday that sources close to the matter said Nippon Steel is set to file a lawsuit in response to Biden's decision.

"We are dismayed by President Biden's decision to block Nippon Steel's acquisition of US Steel, which reflects a clear violation of due process and the CFIUS law. Instead of abiding by the law, the process was manipulated to advance President Biden's political agenda," the two companies said in a joint statement issued on Friday.

The statement also criticized the decision as "shocking and deeply troubling," arguing that it rejected a pro-competitive transaction beneficial to US interests and treated Japan, a US ally, unfairly.

Biden announced his decision on Friday, asserting that the acquisition would place one of the US's largest steel producers under foreign control, creating risk for national security and critical supply chains.

The Washington Post reported that the Committee on Foreign Investment in the US, or CFIUS, submitted its final evaluation of the transaction on Dec 23, cautioning that Nippon Steel's acquisition of US Steel could potentially reduce domestic steel production, therefore posing risks to US national security.

In response, Nippon Steel and US Steel rejected these claims, stating that the President's order lacked credible evidence of a national security issue and was politically motivated.

"Following President Biden's decision, we are left with no choice but to take all appropriate action to protect our legal rights," the companies said.

Biden has opposed Nippon Steel's proposed acquisition of US Steel since his last presidential campaign. Likewise, US President-elect Donald Trump has made it clear he would not approve the deal.

The United Steelworkers union has been a vocal opponent of the acquisition. During the run-up to the 2024 US presidential election, both candidates courted the union's support, justifying their opposition by highlighting the need to protect union members' jobs, said Kazuyuki Hamada, an international political economist and former parliamentary vice-minister for foreign affairs of Japan.