[I]f Biden allows raw politics to prevail by blocking the deal, it will constitute a grave miscarriage of justice.

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President Joe Biden recently declared that although he “[believes] in the justice system,” when “raw politics” infects the legal process, it can lead “to a miscarriage of justice.”  

Fair enough, but Biden offered those words to rationalize his cynical decision to pardon his son for federal gun, tax and any other crimes.  

If the president truly believed those words, however, he would acknowledge that raw politics actually has infected the legal process integral to Nippon Steel’s acquisition of U.S. Steel.  

Specifically, if Biden allows raw politics to prevail by blocking the deal, it will constitute a grave miscarriage of justice.  

When the justice system fails to function properly, moreover, litigation often follows.  

By way of background, the Committee on Foreign Investment in the United States (CFIUS) is the interagency panel authorized to review corporate transactions involving foreign companies for potential national security risks.  Accordingly, CFIUS initiated a review of the proposed deal since Nippon Steel is a Japanese company.  

Government experts and financial analysts naturally expected the deal to sail through CFIUS review for the simple reason that Japan remains strongly and strategically allied with the U.S.  Nearly all previous proposal rejections following CFIUS review involved Chinese companies, whereas the U.S. Steel deal would actually strengthen competition against the Chinese steel companies that currently dominate the global industry.  

But that’s where raw politics that Biden claims to oppose interceded.  The United Steelworkers, the union representing some U.S. Steel employees, forcefully opposed the acquisition even though its preferred purchaser, Cleveland-Cliffs, offered far less for U.S. Steel and was declined.  

Perhaps predictably, President Biden, who enjoys calling himself the most pro-union president in history, sided with the union from the jump.  While he was still running for reelection, Biden announced his opposition to the U.S. Steel deal – a shocking statement that placed undue political pressure on CFIUS to reject the deal.  No doubt, the fact that U.S. Steel is headquartered in the vital swing state of Pennsylvania played a role in the president’s calculus.  

Despite Biden’s unprecedented pressure, however, the major departments represented in CFIUS – the Treasury Department, Defense Department, and State Department – reportedly reached the logical conclusion that no national security issues exist.  “There is no credible analysis in the inter-agency that supports Biden,” one former U.S. official familiar with the internal debate told the Financial Times.  

The leading opponent of the deal within CFIUS, however, is Katherine Tai, the U.S. Trade Representative.  She has apparently taken the president’s raw political desires to heart.  

Perhaps Tai’s opposition shouldn’t come as any surprise.  While in office, Tai delivered remarks at a United Steelworkers convention in 2022, and just one month before the presidential election she joined the United Steelworkers at another event.  Conspicuously, that one was hosted in Pennsylvania by Cleveland-Cliffs, the losing bidder that has undermined the deal.  Tai reportedly told counterparts that supporting the steel industry was vital for Democrats winning Pennsylvania in the election (even though blocking the deal would harm the industry) and that they had to join her.  

Those who prefer that the United States government operate fairly should be concerned about this political maneuvering regarding a policy matter with implications for our foreign relations and our future ability to attract foreign investment.  

As referenced above, litigation is likely if President Biden ultimately blocks the deal.  “If this were to fall through without a legitimate reason or proper procedures, of course we would consider taking legal action against the U.S. government,” Nippon Steel Chairman and CEO Eiji Hashimoto has said.  

That course appears justified given what’s already publicly known.  The Biden administration appears to be disregarding precedent and applicable laws governing CFIUS in order to reach a raw political outcome.  

Going forward, it will be interesting to learn what is not publicly known from possible legal discovery, in which any political influence from the union and Cleveland-Cliffs on government officials like Katherine Tai should become public.  

On that front, Republican lawmakers have already called on the Biden administration to preserve documents related to the deal, justifiably suspecting such improper political influence.  

Accordingly, legal action is sure to follow if President Biden blocks the proposed deal.  But that needless litigation and cost can be avoided if President Biden allows the legal system to operate as intended.  

That would also allow this unnecessarily long chapter to end with a deal that preserves steelworkers’ jobs and strengthens American steelmaking.