U.S. Steel and Nippon Sue Biden Over Decision to Block Deal
U.S. Steel and Nippon Sue Biden Over Decision to Block Deal
In a surprising turn of events, U.S. Steel and Nippon Steel have filed a lawsuit against President Joe Biden over his decision to block a proposed joint venture between the two companies. The deal, which was first announced in November 2021, would have created a new company called Big River Steel with the aim of producing advanced high-strength steel products for the automotive industry.
The lawsuit, filed in federal court in Washington, D.C., alleges that the Biden administration’s decision to block the deal was arbitrary and capricious, and violated the companies’ rights under the Administrative Procedure Act. The companies argue that the decision was driven by political considerations rather than a legitimate concern for competition in the steel industry.
The proposed joint venture between U.S. Steel and Nippon Steel had been under review by the Committee on Foreign Investment in the United States (CFIUS), a government agency tasked with reviewing foreign investments in U.S. companies for national security concerns. In December, CFIUS recommended that the deal be blocked, citing concerns about the potential impact on domestic steel production and national security.
However, U.S. Steel and Nippon Steel argue that the concerns raised by CFIUS were unfounded, and that the proposed joint venture would have actually strengthened the U.S. steel industry and increased competition in the market. They point to the fact that the new company would have been based in the United States and subject to U.S. laws and regulations, and that it would have helped to secure the supply of advanced high-strength steel products for the domestic automotive industry.
The lawsuit comes at a time of heightened tensions between the United States and China over trade and national security issues. The Biden administration has made it clear that it is taking a tough stance on China, and has implemented a number of measures aimed at protecting American industries from what it sees as unfair competition from Chinese companies.
It remains to be seen how the lawsuit will play out in court, but it is clear that U.S. Steel and Nippon Steel are not backing down in their fight to overturn the government’s decision to block their proposed joint venture. The outcome of the case could have far-reaching implications for the future of the U.S. steel industry and for the broader relationship between the United States and its trading partners.