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(Reuters) -The Trump administration filed a motion to extend two deadlines in U.S. Steel and Nippon Steel's lawsuit against a U.S. national security panel to give the government more time to wrap up merger talks with the firms, a filing showed on Monday.
The filing is the clearest indication that U.S. President Donald Trump may allow the deal, scuttled by his predecessor Joe Biden, to proceed in some form.
In January, the two companies filed a lawsuit against the Committee on Foreign Investment in the United States, which scrutinizes foreign investments for national security risks, after it recommended that a merger between them be rejected on national security grounds.
The motion last week from the Department of Justice calls for extending briefing deadlines in the CFIUS lawsuit for 21 days, and rescheduling the oral arguments for the week of May 12 from April 24.
"The requested extension will allow the government to complete its ongoing discussions with the parties regarding the U.S. Steel and Nippon Steel transaction with the goal of eliminating the need for this Court's resolution of the litigation on the merits," the DOJ said in its filing.
Trump in February said that he would not mind if Nippon Steel took a minority stake in U.S. Steel.
Following his comment, a Japanese government spokesperson said that Nippon Steel was considering proposing a bold change in its previous approach of seeking to buy U.S. Steel.
Nippon Steel also tried to schedule a meeting between Vice Chairman Takahiro Mori and U.S. Commerce Secretary Howard Lutnick, according to a report in February.
However, no new deal has been inked yet.
In the lawsuit against CFIUS, the companies alleged that Biden prejudiced the committee's decision and violated the companies' right to a fair review.
They claimed that the then President did so to win the favor of the United Steelworkers (USW) union in the swing state of Pennsylvania, where U.S. Steel is headquartered, in a bid for re-election.
U.S. Steel and Nippon Steel have consented to the motion, but it still remains subject to court approval.
(Reporting by Aishwarya Jain in Bengaluru and Alexandra Alper in Washington, D.C.; Editing by Shinjini Ganguli, Kirsten Donovan)