New York (AFP) – Nippon Steel and US Steel filed suit Monday over US President Joe Biden’s decision to block the Japanese giant’s proposed acquisition of its American rival, accusing his administration of “illegal interference” in the huge transaction. The companies said in a statement that they had initiated legal action in the US Court of Appeals in Washington challenging the review process for the acquisition. They stated they had filed their lawsuit “to remedy the ongoing illegal interference with Nippon Steel’s acquisition of US Steel.”
In the suit, they argued that Biden, who is leaving office on January 20, had improperly used his influence and blocked the deal “for purely political reasons” by ignoring the rule of law to gain favor with workers’ unions. Nippon Steel had touted the takeover as a lifeline for a US company that is long past its heyday, but opponents warned that the Japanese owners would slash jobs. Biden had criticized the $14.9 billion deal for months while holding off on a move that could hurt ties with Tokyo. However, the outgoing president — who made the rebuilding of the US manufacturing base a major goal of his administration — announced Friday that he was blocking the acquisition on national security grounds.
His decision drew sharp criticism from both companies and from Tokyo, as well as some American business lobbies, but was enthusiastically welcomed by the United Steelworkers union, which called it “bold action to maintain a strong domestic steel industry.” Earlier Monday, Japanese Prime Minister Shigeru Ishiba said the veteran Democrat’s decision had sparked worries over future Japanese investments in the world’s largest economy. “It is unfortunately true that there are concerns being raised within Japan’s industrial world over future Japan-US investment,” he told reporters. “It’s something we have to take seriously.”
“We will strongly call on the US government to take steps to dispel these concerns,” he added. “They need to be able to explain clearly why there is a national security concern, or else further discussions on the matter will not work.” Japan and the United States are each other’s top foreign investors. The decision to block the deal enjoyed rare bipartisan agreement. Republican President-elect Donald Trump and his incoming vice president had also campaigned against the sale.
But the US Chamber of Commerce noted that investment from Japan, America’s “important and reliable ally,” supports nearly one million US jobs. “The decision also could have a chilling effect on international investment in America,” it warned. Keizai Doyukai, one of Japan’s three major business groups, noted that protectionist trade policies were likely to strengthen under the next Trump administration. “In areas related to economic security, we should strengthen cooperation with like-minded countries such as South Korea, Australia, the Philippines, and India, so as not to become completely dependent on the United States,” it said.
© 2024 AFP
