Photo/Illutration A U.S. Steel plant in Clairton, Pennsylvania (Asahi Shimbun file photo)

Nippon Steel Corp. plans to file a lawsuit against the U.S. government in response to outgoing President Joe Biden’s decision to block its proposed $14 billion (2 trillion yen) takeover of U.S. Steel.

In his order issued on Jan. 3, Biden said the Japanese steelmaker “might take action that threatens to impair the national security of the United States.”

Nippon Steel and U.S. Steel said the order does not “present any credible evidence of a national security issue, making clear that this was a political decision.”

In a joint statement dated Jan. 3, the companies also said, “We are left with no choice but to take all appropriate action to protect our legal rights.”

A source close to Nippon Steel told The Asahi Shimbun on Jan. 4, “A lawsuit is included in ‘all appropriate action,’ and we will decide on its timing and content from now on.”

Nippon Steel is expected to argue that Biden’s decision to block the acquisition could constitute a violation of “due process and the law.”

“Instead of abiding by the law, the process was manipulated to advance President Biden’s political agenda,” the joint statement said.

A Chinese-affiliated company has won a court ruling in its favor in a lawsuit against the U.S. government after a proposed acquisition failed to win its approval.

However, Biden is believed to have issued the order against Nippon Steel after studying past cases.

Lawyer Akira Inoue, who is well-versed in U.S. government actions, said Nippon Steel does not have a good chance of winning the prospective lawsuit.

Be that as it may, Nippon Steel said it will not abandon its intention to pursue business opportunities in the United States.

David Burritt, chief executive officer of U. S. Steel, also criticized Biden’s order as “shameful and corrupt.”

“He insulted Japan, a vital economic and national security ally,” Burritt said in a statement.

He even said, “The Chinese Communist Party leaders in Beijing are dancing in the streets,” indicating that Biden jeopardized his company’s attempt to counter Chinese rivals.

The proposed acquisition was opposed by the powerful United Steelworkers trade union.

Nippon Steel may opt to purchase only U.S. Steel’s electric furnace business, where workers are not organized by the union, and give up its unionized blast furnace division.

Still, the partial acquisition proposal would also be examined over national security implications under the incoming administration of Donald Trump, who has expressed opposition to Nippon Steel’s buyout of U.S. Steel.

Biden’s order also bewildered the Japanese government, which has backed the deal.

“It is hard to understand and regrettable that a judgment like this has been made over national security concerns,” said Yoji Muto, the industry minister.

A senior official of a ministry in charge of economic affairs speculated that Biden blocked the acquisition solely out of consideration to the United Steelworkers.

A government source also said Biden cited the need to protect U.S. national security because he could not legally halt the transaction on any other ground.

“Japan likely has no other option but to negotiate with Trump and expect him to retract the order,” a high-ranking government official said Jan. 4.

(This article was written by Seisaku Yamamoto, Shino Matsuyama and Doni Tani.)

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