Nippon Steel, US Steel File Lawsuits Over Biden Decision

Facts

• Nippon Steel and US Steel filed federal lawsuits Monday challenging Pres. Joe Biden's decision to block a $15B merger between the two companies, saying Biden's move violated due process and was politically motivated. In a separate lawsuit, the companies also accused steel-making rival Cleveland-Cliffs Inc. of anti-competitive and racketeering actions to block the deal.^[1]
• This comes after Biden blocked the merger on Jan. 3, citing national security concerns about maintaining domestic steel production.^[2][3]
• US Steel's stock dropped 6.5% following Biden's announcement to block the deal, which came after federal regulators had been deadlocked on whether to approve it.^[4]
• Nippon Steel had promised to invest $2.7B in US Steel's aging blast furnace operations and committed to no layoffs for 10 years while maintaining production capacity.^[4]
• US Steel currently employs fewer than 22K workers, down from 340K in 1943, and faces significant competition from Chinese manufacturers.^[4]
• Both President Biden and Pres.-elect Trump both opposed the deal, each vowing to block the acquisition while campaigning in 2024. The incoming Trump administration has reaffirmed its commitment to block the deal.^[5]

Sources: ^[1]Al Jazeera, ^[2]CBS (a), ^[3]CBS (b), ^[4]Associated Press and ^[5]FOX News.

Narratives

• Establishment-critical narrative, as provided by Associated Press and Al Jazeera. Blocking this deal makes the future of the steel industry in Pennsylvania uncertain, and would be against the best interests of US workers. Nippon Steel had promised, along with its significant investment, that it would not have any layoffs for 10 years — a commitment that workers at these American plants are unlikely to get from anywhere else. In addition to protecting union jobs through guaranteed employment, this investment would also strengthen American steel production by providing much-needed modernization to aging facilities. The Biden administration's decision to block this acquisition lacks a strong legal basis and is politically motivated.
• Pro-establishment narrative, as provided by FOX News. Maintaining American ownership of strategic industries like steel production is essential for national security and supply chain resilience. Allowing a foreign company like Nippon Steel to take control of critical domestic steel production would be a threat to American interests. This acquisition would have very likely undermined the domestic steel industry while bolstering the industry abroad — undercutting American trade and critical domestic infrastructure needs. There are other ways besides this deal to ensure the success of US Steel.