Historic Steel Takeover Is Getting Closer. Will Trump Gain an Ally in the Trade War with China?

• Nothing should now stand in the way of Nippon Steel's takeover of US Steel for over $14 billion.
• Donald Trump is counting on Japanese investment in the steel industry, which is no longer competitive.
• The details of the agreement will be announced next Friday, when they will be presented by the US President at the headquarters of US Steel in Pittsburgh.

After many weeks of analysis and negotiations between representatives of the American federal administration and the authorities of the Japanese steel company Nippon Steel, a compromise regarding the takeover of US Steel was reached.

This made it possible to withdraw President Donald Trump’s objection to the transaction, which was officially announced at the White House last Friday.

All matters have now been clarified, including the investment package and the retention of the majority of American managers in the future board of US Steel.

Details of the transaction will be announced next Friday by Donald Trump during a visit to the company's headquarters in Pittsburgh, where he will meet with the boards of both companies and representatives of trade unions.

Nippon Steel made a formal takeover offer for its American competitor in September 2023, offering to buy out all shares.

The transaction is valued at over USD 14 billion.

The transaction was valued at over $14 billion, which means that one share of publicly traded US Steel is worth $55.

From the outset of the offer , former President Joe Biden’s administration had opposed the takeover , as had some unionized workers.

In addition to the purely business elements, the case also had a political subtext , as the presidential election campaign was underway. Democrats believed that the Japanese investment would lead to mass layoffs and a reduction in steel production in the United States.

Ultimately, in January 2025, just days before the end of his term, Joe Biden exercised his presidential authority and blocked the deal .

In his justification, he cited the threat to the American security of supply of steel and steel products, especially the arms sector.

The second argument was the disruption of existing supply chains , including ore supplies, and the possibility of limiting competitiveness in the segment of finished steel products.

Initially, after becoming president, Donald Trump reiterated his earlier objection, but in April he decided that the matter should be thoroughly analyzed.

"We remain concerned that Nippon Steel, as a foreign corporation with a long and documented history of violating our trade laws, will further restrict domestic manufacturing capacity and threaten thousands of good, union jobs," United SteelWorkers president David McCall wrote in a statement.

According to the agreement, the CEO will remain an American, and the majority of the board will also consist of American managers. The company's headquarters will remain in Pittsburgh, emphasized Pennsylvania senator Dave McCormick in an interview for CNBC.

The negotiated agreement includes an investment package of around USD 7 billion in the production part, and another several billion will be allocated to activities related to improving the efficiency of the steel plant.

Donald Trump Wants to Use Japan in Trade War with China

The first stage of the merger will be the construction of a new US Steel steel plant in Mon Valley for $2.4 billion, which will save 10,000 jobs and create an additional 10,000 positions in construction and assembly companies.

Some analysts emphasize that President Donald Trump's consent is part of a political game that is intended to tie Japan more closely to the United States in its trade game against China.