In a social media post US President Donald Trump said a planned partnership between Nippon Steel and US Steel will add $14 bn (€12.4 bn) to the United States’ economy and ensure US Steel remains headquartered Pittsburgh.
The bulk of the investment will occur in the next 14 months and result in at least 70,000 jobs, he stated.
Though interpreted by investors and industry observers that he would approve the Japanese company linking up with US industrial icon, the exact terms of the deal including how the partnership would be structured and ownership arrangement remains unclear.
In later comments to reporters, he said: “[US Steel] will be controlled by the United States. Otherwise, I wouldn’t make the deal. It’s an investment and it’s a partial ownership, but it will be controlled by the USA.”
President Trump’s comments came days after the 21 May deadline for the Committee on Foreign Investment in the United States (CFIUS) to complete a review into Nippon’s acquisition of US Steel for $14.9 bn, including assuming $800 M of debt. He has to decide on the proposed combination by 5 June.
Nippon has pledged to invest at least $11 bn in US Steel, including $1 bn on a new steel mill and possibly $3 bn more on that plant, as well as keep the company’s headquarters in Pittsburgh.
Tokyo-headquartered Nippon described the partnership as a game changer for US Steel, its stakeholders, the United States’ steel industry and the country’s broader manufacturing base. “We share the Trump administration’s commitment to protecting American workers, the American steel industry, and America’s national security,” it added.
US Steel said it will remain American and grow bigger and stronger through a partnership with Nippon Steel which brings massive investment, new technologies and thousands of jobs over the next four years.
Yet President Trump, like his predecessor Joe Biden, had opposed Nippon’s bid, made at the end of 2023. Last December, Trump said he was “totally against the once great and powerful US Steel being bought by a foreign company.” Unions leaders and politicians have also spoken out against the takeover.
The United Steelworkers’ union president Dave McCall said: “Our concern remains that Nippon, a foreign corporation with a long and proven record of violating our trade laws, will further erode domestic steel making capacity and jeopardise thousands of good, union jobs.”
However, Jason Zugai, a union official at US Steel’s Irvin finishing plant near Pittsburgh, suggested central government could take on a major role in the transaction. “It sounds like the deal’s done,” he was quoted as saying in media reports.
His understanding is that Nippon will make all the profit with the government having “a golden chair’’ which allows it to veto any plans to idle or shut down US Steel plants.
President Trump plans to visit US Steel’s operations in Pittsburgh for a rally on 30 May.
Approved Nippon-US Steel ‘partnership’ is a game changer for U.S. Steel industry
Late Friday afternoon ahead of the long Memorial Day weekend, President Trump announced approval for the ‘partnership’ between Nippon Steel Corporation (NSC) and US Steel (USS). Pending some final details, this high-profile deal appears to be ready to close after President Trump materially upsized the overall investment by NSC as well as inserting oversight from the US Government to eliminate any perceived national security issues.
What we are left with is a deal vastly improved from the one former President Biden blocked this past January. NSC has stepped up to promise $14 billion of additional investment including $4 billion for the construction of a new mill. With the ownership change, NSC has promised to bring their market-leading steelmaking and processing technology to the USA.
This acquisition appears to be labeled as a partnership, as US Steel will remain influenced by US citizens via a separate board and top managers. Additionally, the US Government will have veto power over any production change that could threaten the national security of the USA.
This deal is a game changer for manufacturing in the USA. In order for reshoring to truly take place, manufacturers require plentiful and competitively priced inputs, notably labor, energy, and materials. The USA has an abundance of all three, yet this deal will create a ‘super competitor’ in the steel industry. A NSC-owned US Steel will now operate on a longer timeline with plentiful capital to build and operate the world’s most technologically advanced steel assets.
