Biden halts U.S. Steel sale to Nippon over national security fears

On January 6, 2025, U.S. Steel, based in Pennsylvania, and Japan-based Nippon Steel initiated legal action against the Biden administration after President Joe Biden's decision to block their proposed $14.9 billion merger. This controversial block was based on national security concerns, with Biden emphasizing the importance of domestic steel production in ensuring U.S. security. The Committee on Foreign Investment in the United States (CFIUS) had previously failed to approve or disapprove the merger, giving the President the opportunity to intervene. The companies filed their lawsuit in the U.S. Court of Appeals for the District of Columbia, arguing that their rights were violated through the blocking of the merger, claiming it was influenced by political motivations surrounding labor union pressures. They accused the United Steelworkers (USW) labor union and Cleveland-Cliffs, a rival steelmaker, of colluding to prevent their acquisition, alleging that this interference compromised a fair evaluation of their proposal. The companies asserted that the union was motivated by self-interest, aiming to protect its own members and influence on the labor market. President Biden expressed that without a strong domestic steel industry, U.S. national security would be compromised. His administration has prioritized national interests and supply chains, particularly amid competitive international pressures and challenges in the supply market. The decision to block the merger followed a period of heightened scrutiny of foreign investments in critical U.S. industries, an issue that has been a significant focus of the current administration. The steel industry is regarded as pivotal for maintaining the country's infrastructure and defense capabilities, and Biden’s decision underscores the administration's commitment to safeguarding American industries from foreign ownership. U.S. Steel and Nippon Steel argued that the merger would not only benefit their companies but also stakeholders, and they planned to respond to what they perceive as baseless allegations from opponents, indicating that they would continue to fight for the deal in court.