U.S. Steel and Nippon Steel sued the Biden administration after it blocked their $15 billion merger, citing political interference and national security concerns. They also filed a separate lawsuit against Cleveland-Cliffs and the USW, accusing them of coordinating to prevent the deal. The Biden administration and USW defended the decision, claiming it protected national security and the domestic steel industry.

U.S. Steel and Japan-based Nippon Steel filed a lawsuit against the Biden administration on Monday over a decision made last week to block their merger. The proposed deal, in which Nippon Steel sought to acquire the second-largest domestic steel producer for nearly $15 billion, was halted by the Biden administration, which argued it would pose a threat to U.S. national security.

In their lawsuit, filed in the U.S. Court of Appeals for the District of Columbia, the two companies claim that political considerations during an election year interfered with the formal government review process of the merger. They allege that the Biden administration used the review as a pretext to block the merger to appease the United Steelworkers (USW) labor union.

The lawsuit further asserts that President Biden’s decision to block the merger was the result of a deliberate, months-long effort to leverage the United States' national security framework in order to honor a promise made to USW leadership. "President Biden’s Order is the culmination of a months-long campaign to subvert and exploit the United States’ national security apparatus for the purpose of keeping a promise made by the President and his advisors to the USW leadership," U.S. Steel and Nippon Steel said in a statement about the lawsuit.

The merger was blocked shortly after the Committee on Foreign Investment in the United States (CFIUS) declined to issue a formal recommendation about the deal, leaving President Biden with the final decision. CFIUS expressed concerns about the national security risks associated with losing a significant domestic steel producer. President Biden echoed these concerns when he announced the block, stating, "Without domestic steel production and domestic steel workers, our nation is less strong and less secure."

U.S. Steel and Nippon Steel argue that Biden’s intent to block the merger was made clear as early as March 2024, well before CFIUS began its review. They also pointed out that USW, which holds significant influence in Pennsylvania, a key swing state, has a membership of 1.2 million, which could have swayed political considerations in the decision. “CFIUS engaged in a process that was designed to reach a predetermined result: supporting President Biden’s political decision,” the companies said.

In addition to suing the Biden administration, U.S. Steel and Nippon Steel filed a second lawsuit against Cleveland-Cliffs, a domestic steelmaker, and USW President David McCall, accusing them of illegally coordinating efforts to block the merger. The lawsuit claims that Cleveland-Cliffs, which sought to merge with U.S. Steel, struck a deal with USW to prevent Nippon Steel's acquisition. The legal action, filed in U.S. District Court for the Western District of Pennsylvania, also names Cleveland-Cliffs CEO Lourenco Goncalves as a defendant for his involvement in these alleged coordinated efforts.

“Cleveland-Cliffs and USW’s anticompetitive and unlawful actions were brazen and obvious – consisting of public lies, pressure tactics, and an illegal antitrust conspiracy,” U.S. Steel and Nippon Steel said.

USW President David McCall responded to the allegations, supporting the Biden administration’s decision to block the merger. In a statement to ABC News, McCall asserted that the decision protected U.S. interests and national security. "By blocking Nippon Steel’s attempt to acquire U.S. Steel, the Biden administration protected vital U.S. interests, safeguarded our national security, and helped preserve a domestic steel industry that underpins our country’s critical supply chains," McCall said. He also expressed confidence in defending against the claims in the lawsuit, calling the allegations "baseless."

Cleveland-Cliffs sharply criticized the lawsuits, calling them a "shameless effort to scapegoat others for U.S. Steel’s and Nippon Steel’s self-inflicted disaster." The company pointed out that the deal had faced bipartisan opposition, including from former President Trump, who had vowed to block the acquisition.

Shares of U.S. Steel rose nearly 4% in pre-market trading on Monday morning, while Cleveland-Cliffs’ stock also climbed about 4% in early trading.