Biden Blocks Nippon Steel Deal, but CFIUS Expected to Continue Clearing Japanese Investments in the United States
Publications
January 2025
By: Jenner & Block LLP
On January 3, 2025, US President Joe Biden published an order blocking Nippon Steel’s proposed acquisition of US Steel, citing the Committee on Foreign Investment in the United States’ (CFIUS) finding that the deal would “place one of America’s largest steel producers under foreign control and create risk for [US] national security and our critical supply chains.” This is the first time in the history of CFIUS that a US president has blocked a Japanese investment in the United States.
President Biden’s decision surprised many lawyers with CFIUS experience because Japan is a strong US ally with a long history of investing in the United States, and in similar previous deals, CFIUS has been willing to mitigate availability concerns by entering into a supply assurance agreement with the foreign acquirer. In response, the parties filed a lawsuit against CFIUS, arguing that its decision-making process was subject to procedural irregularities and its national security assessment was tainted by electoral politics. Lawsuits against CFIUS are rarely successful—because the courts usually defer to federal agencies like CFIUS when the case involves national security, and US federal court cases can take years to resolve—so the parties face long odds of succeeding in court and eventually closing the deal.
Nevertheless, it is important for Japanese investors to understand that President Biden’s decision resulted from a unique confluence of election-year politics, conflation of economic policy with national security policy, and uncommon process irregularities. As a result, President Biden’s decision diverges from CFIUS’s usual treatment of Japanese investments. While it is always important to assess the CFIUS risks of potential investments in the United States, it is unlikely that President Biden’s decision will fundamentally change the way CFIUS reviews Japanese investments unless they are subject to similar high-profile, political concerns.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
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© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
Publications
January 2025
By: Jenner & Block LLP
On January 3, 2025, US President Joe Biden published an order blocking Nippon Steel’s proposed acquisition of US Steel, citing the Committee on Foreign Investment in the United States’ (CFIUS) finding that the deal would “place one of America’s largest steel producers under foreign control and create risk for [US] national security and our critical supply chains.” This is the first time in the history of CFIUS that a US president has blocked a Japanese investment in the United States.
President Biden’s decision surprised many lawyers with CFIUS experience because Japan is a strong US ally with a long history of investing in the United States, and in similar previous deals, CFIUS has been willing to mitigate availability concerns by entering into a supply assurance agreement with the foreign acquirer. In response, the parties filed a lawsuit against CFIUS, arguing that its decision-making process was subject to procedural irregularities and its national security assessment was tainted by electoral politics. Lawsuits against CFIUS are rarely successful—because the courts usually defer to federal agencies like CFIUS when the case involves national security, and US federal court cases can take years to resolve—so the parties face long odds of succeeding in court and eventually closing the deal.
Nevertheless, it is important for Japanese investors to understand that President Biden’s decision resulted from a unique confluence of election-year politics, conflation of economic policy with national security policy, and uncommon process irregularities. As a result, President Biden’s decision diverges from CFIUS’s usual treatment of Japanese investments. While it is always important to assess the CFIUS risks of potential investments in the United States, it is unlikely that President Biden’s decision will fundamentally change the way CFIUS reviews Japanese investments unless they are subject to similar high-profile, political concerns.
This article is available in the Jenner & Block Japan Newsletter. / この記事はJenner & Blockニュースレターに掲載されています。
Related Articles
Related Capabilities
© 2026 Jenner & Block LLP. Attorney Advertising. Jenner & Block LLP is an Illinois Limited Liability Partnership including professional corporations. This publication, presentation, or event is not intended to provide legal advice but to provide information on legal matters and/or firm news of interest to our clients and colleagues. Readers or attendees should seek specific legal advice before taking any action with respect to matters mentioned in this publication or at this event. The attorney responsible for this communication is Brent E. Kidwell, Jenner & Block LLP, 353 N. Clark Street, Chicago, IL 60654-3456. Prior results do not guarantee a similar outcome. Jenner & Block London LLP, an affiliate of Jenner & Block LLP, is a limited liability partnership established under the laws of the State of Delaware, USA and is authorised and regulated by the Solicitors Regulation Authority with SRA number 615729. Information regarding the data we collect and the rights you have over your data can be found in our Privacy Notice. For further inquiries, please contact dataprotection@jenner.com.
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