Eiji Hashimoto, CEO of Nippon Steel
What Happened: Hashimoto is pursuing legal action to prompt a review of his proposed $15 billion acquisition of U.S. Steel
Hashimoto, speaking in Tokyo, argued that the merger would bolster U.S. national security by creating a more robust company.
He stated, "We don't think there is any other route that can strengthen the U.S. steel industry more than this deal. We never think that industry can become stronger through tariffs alone."
The legal cases filed on Monday claim Biden's decision constitutes "wrongful interference."
The debate centers on whether a Japanese acquisition of US Steel would weaken the industry or enhance it through capital and technology. Biden's order gives the companies 30 days to abandon the deal unless the Committee on Foreign Investment in the U.S. (CFIUS) grants an extension. Hashimoto urged Cfius to reconsider under a new administration, aiming for another review.
Legal experts suggest the challenge to the CFIUS process may be difficult due to broad national security definitions. However, the case tests the limits of the Executive Branch's authority over foreign investments.
Why It Matters: The decision by President Biden to block the $14.9 billion acquisition of U.S. Steel by Nippon Steel Corp. was announced on Jan. 3, 2025. The administration cited concerns that foreign ownership could jeopardize national security and disrupt essential supply chains. The White House emphasized the vital role of steel in maintaining the nation's infrastructure, defense, and industrial base.
Following this, Nippon Steel filed a lawsuit on Jan. 6, 2025, challenging the Biden administration's decision. The lawsuit alleges that the President's opposition was influenced by political motives, particularly to gain union support in Pennsylvania. Legal experts indicate that while the lawsuit faces significant hurdles, it might extend the timeline for the deal, allowing for potential alternative arrangements.
