Nippon Steel & US Steel "Biden's Political Intent"
Trump "Tariffs Will Increase Profitability"
U.S. President Joe Biden's blocking of Nippon Steel's acquisition of US Steel has sparked backlash from the companies involved. They have filed a lawsuit challenging President Biden's disapproval decision, claiming that the U.S. government sabotaged the deal for political reasons.
On the 6th (local time), according to the Washington Post (WP) and the Wall Street Journal (WSJ), Nippon Steel filed a lawsuit with the U.S. Federal Court of Appeals demanding the invalidation of President Biden's order disallowing the acquisition plan of US Steel and the U.S. government's review process.
Both companies argued that during the presidential election period, President Biden unjustly interfered with the review process of the Committee on Foreign Investment in the United States (CFIUS), under the U.S. Treasury Department, for political purposes to gain the support of the steelworkers' union. They claimed the conclusion was reached without a substantive investigation and no evidence was presented regarding national security concerns.
They also sued Cleveland-Cliffs, a U.S. steel manufacturer that previously attempted to acquire US Steel, along with its CEO Lorenzo Goncalves and David McCall, chairman of the U.S. Steelworkers union. The claim is that Cleveland-Cliffs obstructed the acquisition of US Steel to monopolize the U.S. steel market.
Nippon Steel plans to hold a press conference on the 7th to explain the details.
Earlier, on the 3rd, President Biden blocked Nippon Steel's $14.9 billion (approximately 21.7987 trillion KRW) acquisition of US Steel, citing concerns over weakening national security.
WP analyzed that the legal attack by Nippon Steel and US Steel reflects expectations that Donald Trump, the U.S. president-elect who will be inaugurated on the 20th, will revive cooperative relations.
However, President-elect Trump also expressed a negative stance. On the same day, he posted on his social media platform Truth Social, "Why would they want to sell US Steel now when it will become a much more profitable and valuable company due to tariffs?" He added, "Wouldn't it be great if US Steel, once the world's top company, moves toward greatness again? This could happen very quickly."
Trump's remarks are interpreted to mean that if his high tariff policy is implemented, US Steel can regain competitiveness, so there would be no reason to sell. During the presidential campaign, Trump pledged to impose a 10% tariff on all imports and a 60% tariff on imports from China. He has also expressed opposition to Nippon Steel's acquisition of US Steel.
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