A MARTÍNEZ, HOST:
U.S. Steel is going to court to try to defend its $15 billion sale to a Japanese steelmaker. The legal action comes just days after President Biden moved Friday to block the deal on national security grounds. U.S. Steel and Nippon Steel insist their combination would enhance, not threaten, U.S. security, and they accuse the president of playing politics. NPR's Scott Horsley joins us now. All this is happening really fast Scott. So what are the companies arguing in their lawsuit?
SCOTT HORSLEY, BYLINE: The companies say in blocking this sale, the president violated their due process rights and illegally interfered with a good faith regulatory review. You know, the president warned that letting Nippon Steel buy U.S. Steel could jeopardize domestic steel supplies. But the companies argue the president was really motivated by politics and trying to curry favor with the Steelworkers Union, which has been strongly opposed to this transaction.
U.S. Steel is headquartered in the political swing state of Pennsylvania, and I should note, both President-elect Donald Trump and Vice President Harris had also spoken out against this sale. Despite the president's opposition, the companies say they remain committed to the transaction, and they've promised to defend it aggressively. The lawsuit challenging the president's move is one of two legal actions that the companies announced today.
MARTÍNEZ: So one of two - what's the second one about?
HORSLEY: Yeah, the second suit was filed in federal court in Pennsylvania, and it targets the international president of the Steelworkers Union, David McCall, and a rival steelmaking company, Cleveland-Cliffs, which had made its own offer to buy U.S. Steel. That lawsuit accuses the union leader and Cleveland-Cliffs of interfering with Nippon Steel's acquisition in an effort to stifle a would-be competitor.
Now, Nippon Steel insist it's in the best position to revitalize U.S. Steel, which has slipped to No. 3 in the domestic steelmaking industry. The Japanese company has promised to invest almost $3 billion in U.S. Steel's aging blast furnaces. And without that investment, U.S. Steel has warned it might have to focus its efforts away from big steel mills in Pennsylvania and Indiana towards newer nonunion mills in places like Arkansas, potentially at the cost of thousands of good union jobs. In fact, that prospect is why some U.S. Steel employees broke with their union and supported this sale. The 124-year-old U.S. Steel company even threatened that if the deal doesn't go through, it might move its headquarters out of Pittsburgh.
MARTÍNEZ: What are the legal prospects for these lawsuits?
HORSLEY: It's hard to say. The law does give the president broad powers to intervene in economic activity in order to protect national security, but that power is very rarely invoked and almost never against a company based in an allied country like Japan. The companies argue their combination would actually strengthen the domestic steelmaking industry, so it could better compete against what they say is the real national security threat, competition from China. And those economic arguments, you know, could get an airing in court.
The litigation could also expose some internal divisions within the Biden administration. The interagency committee that oversees foreign investment in the U.S. was actually split over whether this deal poses a genuine threat to national security. And over the weekend, the Washington Post reported, some of President Biden's own top advisors urged him not to block this sale, especially once the November election had come and gone. So all of that internal wrangling could provide some ammunition for U.S. Steel and its would-be Japanese suitor in court.
MARTÍNEZ: All right. NPR's Scott Horsley, thanks for ironing this out.
HORSLEY: You're welcome.
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