U.S. Steel and Nippon Steel on Monday filed a lawsuit against U.S. President Joe Biden’s order as he blocked the $14.9 billion purchase deal of the American steelmaker by the Japanese company.
In response to this, Cleveland-Cliffs Inc. made statements related to the United States Government’s decision to prohibit the unlawful acquisition of the United States Steel Corporation by Nippon Steel of Japan.
“As of this morning, Nippon Steel and U.S. Steel continue to play the blame game in a desperate attempt to distract from their own failures. Today’s lawsuits against the U.S. Government, the USW, and Cleveland-Cliffs represent a shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster”, said Lourenco Goncalves, Chairman, President and CEO.
He claimed their response as a “bad course of action”.
This deal drew instant bi-partisan opposition, including from President Trump, who has vowed multiple times that he would block the deal, along with oppositions from Cleveland-cliff and USW.
The then-Senators J.D. Vance, Marco Rubio and Josh Hawley requested CFIUS to block the sale of U.S. Steel to Nippon Steel, and rightfully indicated hey said that the trade protections should be able to induce foreign investments that will help in expanding domestic production as well as creating job opportunities for Americans. however, they did not see the scope for the same with this takeover.
“Allowing foreign companies to buy out American companies and enjoy our trade protections subverts the very purpose for which those protections were put in place.” Vance, Rubio and Hawley followed up with a letter to President Biden on May 9, 2024, urging President Biden to ‘summon the courage to do the ‘right thing’.
The U.S. Government has recognized the increasing influence of Nippon Steel’s history of overproduction in Japan and unfair trade practices in the U.S. which were cited as significant risks to the economy, workforce, infrastructure, and national defense. This underscores the deal’s potential threat to U.S. national security.
David Burritt, a key figure in the industry, sold a portion of his stock on the day the decision was announced, signaling recognition of the risks involved.
Instead of accepting this colossal error in judgment, U.S. Steel, its CEO David Burritt, and Nippon Steel have opted for blame and legal theatrics.
“David Burritt continues to embarrass himself to deeper levels at each step. Their lawsuit is completely baseless. We are well prepared to litigate and look forward to exposing the facts in court.” Cleveland-Cliff official says.