Nippon Steel "Lawsuit Over US Steel Acquisition Denial"... Trump "Why Sell?" (Summary)

Nippon Steel "Illegal Political Interference... Unacceptable"
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 Biden's disapproval decision, claiming the U.S. government sabotaged the deal for political reasons.

According to Kyodo News and NHK on the 7th, Eiji Hashimoto, Chairman of Nippon Steel, held a press conference stating, "We cannot accept this because the review was inappropriate due to President Biden's illegal political interference," adding, "This matter is not only very important to our management strategy but we are still convinced it is highly beneficial to both the Japanese and U.S. governments."

Hashimoto Eiji, Chairman of Nippon Steel. Photo by EPA Yonhap News

He continued, "By applying our technology and products, we will be able to produce steel in the U.S. that currently cannot be sufficiently manufactured," and said, "We believe this also contributes to strengthening U.S. national security, and we will never give up on conducting business in the U.S."

The previous day, according to The Washington Post (WP) and The Wall Street Journal (WSJ), Nippon Steel filed a lawsuit in the U.S. Federal Court of Appeals demanding the invalidation of President Biden's order blocking 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 in 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 support from the steelworkers' union. They claimed the conclusion was reached without a substantive investigation and no evidence was presented regarding national security concerns.

Additionally, they 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 to monopolize the U.S. steel market.

Earlier on the 3rd, President Biden blocked Nippon Steel's plan to acquire US Steel for $14.9 billion (approximately 21.7987 trillion KRW), citing concerns over weakening national security.

WP analyzed that the legal attack by Nippon Steel and US Steel contains expectations that Donald Trump, the U.S. president-elect set to take office 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, "They will become a much more profitable and valuable company because of tariffs, so why would they want to sell US Steel now?" 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 is no reason to sell. During the election, Trump pledged to impose a 10% tariff on all imports and a 60% tariff on Chinese imports. He has also expressed opposition to Nippon Steel's acquisition of US Steel.