Periodic democratic elections are a hallmark of our republican form of government and provide both safeguards and opportunities for all Americans. A problem occurs when those in power act in self-interest to corrupt fundamental principles and processes which support the confidence of industry under the rule of law.
A case in point is the contracted acquisition of US Steel by the Japan-based Nippon Steel. In March 2024, during an election year but well before he left office, then President Biden promised union bosses that he would, in essence, use presidential power to scuttle the purchase. He ultimately did and his action was described as "unjust political interference" at a recent press conference by no less authority than Japanese prime minister Shigeru Ishiba, the leader of one of our closest allies.
Such strong remarks from one of our most steadfast partners should prompt the United States to review the decision and the troubling precedent the former President has set. Biden naturally had to give a reason for blocking the acquisition and he played the “national security” card, which in this case he used prematurely. This is indicative of a broader disregard for the rule of law that permeated the 46th President’s tenure -- one that will not continue with the election of President Donald J. Trump.
Typically, before a definitive rejection is made on the basis of national security, an acquisition like this would undergo a required, routine review by the Committee on Foreign Investment in the United States (CFIUS). A decision that the acquisition would not harm American interests, given Japan's close alliance with the U.S. and concessions made as a part of the proposed transaction would have been typical. Instead, the process was hijacked by election-year politics and subjected to undue political influence.
Biden undermined the integrity of the CFIUS review process by publicly voicing opposition to the deal before the committee could even start its work. Such a premature pronouncement discounts any claim to protecting national security. Indeed, the politically motivated action, which appears to have been taken to win the endorsement of the United Steelworkers Union in a tight presidential race, represents illegal interference with what should have been an impartial process.
Biden ultimately received that endorsement and throughout 2024 he continued to publicly oppose the transaction during numerous public events. Yet despite these efforts to sway the members of CFIUS, the panel could not reach an agreement that the proposed acquisition would pose any national security risks. That notwithstanding, politics ultimately prevailed. With CFIUS unable to reach a consensus, the decision reverted to Biden, who fulfilled his campaign promise to union leaders and killed the deal, against the advice of many of his most senior national security advisors.
Biden’s interference with the Nippon acquisition has far-reaching consequences and calls for judicial intervention that extends beyond just holding the Biden administration accountable for such blatant political meddling. If a President can invoke “national security” to justify arbitrary interventions in private-sector dealings without substantive evidence -- a practice fundamentally at odds with constitutional principles and statutory limits on executive power -- it would undermine the rule of law and jeopardize the delicate balance of powers envisioned by our Founders.
Such an outcome would also be a tacit endorsement of the actions of Cleveland-Cliffs -- a direct competitor to and failed bidder for U.S. Steel that is alleged to have engaged in anti-competitive collusion. Its CEO Lourenco Goncalves is reported to have openly boasted about his ability to “make a deal that I don’t agree with not to close.” According to a lawsuit filed by Nippon Steel and U.S. Steel, Goncalves “attempted to bully U. S. Steel into a deal by informing U. S. Steel that Cliffs had reached an agreement with the USW to only endorse Cliffs’ bid and actively obstruct a transaction with anyone else.” If true, such actions could be direct violations of the antitrust principles established under the Sherman and Clayton acts, which prohibit conspiracies to restrain trade.
Fortunately, the lawsuits filed by U.S. Steel and Nippon Steel challenge the legality of the Biden decision and hold leaders at USW and Cliffs responsible for their alleged anticompetitive activities. A favorable outcome would reaffirm the principles that underpin our constitutional system and present an opportunity for a fresh review of the deal under the Trump administration. With Secretary of Commerce Howard Lutnik confirmed, an even clearer path exists to shepherd through a new agreement that would be a stark contrast to the tainted process led by the Biden Administration.
Beyond the immediate implications for U.S. Steel and Nippon Steel, this case is a litmus test for America’s commitment to lawful governance. While democratic elections define our government, political maneuvering must never supersede constitutional obligations. Upholding the plaintiffs’ claims in court will not only vindicate the affected companies but also send a clear message that the United States remains a nation where laws, not politics, govern economic decisions.
John Swallow is the former Attorney General of Utah
Image: US Steel