American investment could become less welcome, undermining Japan’s progress on corporate reforms.

The assessment by analysts comes after US President Joe Biden blocked Nippon Steel Corp’s US$14.9 billion bid for US Steel Corp.

U.S. Steel and Japan’s Nippon Steel sued the United States government on Monday in a last-ditch attempt to revive their attempted merger after President Biden blocked it last week on the basis that the transaction posed a threat to national security.

The companies argued in a lawsuit announced on Monday that Biden violated the Constitution by blocking the merger via a sham national security review that deprived the companies of their right to a fair process.

Nippon Steel and U.S. Steel are filing a federal lawsuit challenging the Biden administration’s decision to block a proposed nearly $15 billion deal for Nippon to acquire Pittsburgh-based U.S. Steel