Biden Blocks Nippon Steel’s U.S. Steel Acquisition: National Security or Politics at Play?

On January 3, 2025, President Joe Biden issued an executive order blocking Nippon Steel’s proposed acquisition of U.S. Steel, citing credible evidence that the deal could impair U.S. national security. The decision followed an extensive review by the Committee on Foreign Investment in the United States (CFIUS), an interagency body tasked with evaluating foreign investments for potential security risks. Despite three ninety-day review periods, CFIUS could not reach a consensus on whether the risks could be mitigated, leaving the final decision to the president.

This case stands out for its unusually public nature. Both Biden and senior officials expressed strong support for U.S. Steel remaining domestically owned during the CFIUS process—a departure from the committee’s standard practice of confidentiality. Nippon and U.S. Steel argue that these public remarks, coupled with procedural flaws, violated their constitutional rights to due process. They have petitioned the U.S. Court of Appeals for the D.C. Circuit, seeking to overturn the executive order and mandate a fair review.

Their challenge faces significant hurdles. Judicial scrutiny of CFIUS decisions is exceedingly rare, as Congress designed the process to grant broad discretion to the executive branch in matters of national security. The landmark Ralls v. CFIUS?case of 2014, often cited as precedent, differs significantly: Ralls?had acquired property interests before the government’s intervention, whereas Nippon’s deal was blocked preemptively.

Nippon’s strongest argument hinges on the claim that Biden’s public comments preordained the outcome, undermining the legitimacy of the review process. However, courts are historically reluctant to question national security decisions, particularly when any plausible security justification exists. Critics suggest the president’s decision may have been influenced by broader political considerations, but this is precisely the structure Congress envisioned—placing such decisions firmly within the purview of the political branches, largely shielded from judicial review.

Despite their legal challenges, Nippon and U.S. Steel’s case has illuminated the opaque workings of CFIUS in complex cases. By releasing unclassified correspondence, they have offered rare insight into how national security reviews are conducted, potentially guiding future transactions in navigating these hurdles.

As this case highlights critical intersections between law and national security, it raises important questions for legal practitioners and policymakers alike: should courts take a more active role in such reviews, or does the current deference to the executive branch appropriately balance legal and security concerns? What implications do you see this case having for the future of CFIUS and due process in national security law?