Trump Orders New Review of Nippon-U.S. Steel Merger
White House says the review is meant to assist the president in determining whether further action would be appropriate
President Trump ordered a new national security review of Nippon Steel’s 5401 -7.05%decrease; red down pointing triangle plan to acquire U.S. Steel X 16.13%increase; green up pointing triangle, offering a new life for a $14 billion deal that was blocked by former President Joe Biden.
The White House on Monday said a fresh look conducted by the Committee on Foreign Investment in the U.S. would help the president determine whether further action would be appropriate. The review gives the administration the flexibility to craft an agreement that could allow the companies to complete a deal.
Nippon Steel said that “an objective, fact-based review of our proposed partnership with U.S. Steel will show that it strengthens American economic and national security so that U.S. Steel remains a proud American company.”
U.S. Steel shares surged 16% in afternoon trading.
The blockbuster deal, which would shift the storied U.S. steelmaker to a much-larger Japanese steel company, has been in limbo since President Trump took office earlier this year.
Biden blocked the merger in January, citing national security concerns after an earlier Cfius review. Nippon Steel and U.S. Steel are challenging the decision in federal appeals court, arguing that the deal wasn’t given fair consideration by the Biden administration.
“We appreciate and commend President Donald Trump’s leadership,” U.S. Steel said. “His action today validates our board’s bold decision to challenge President Biden’s unlawful order.”
The new Cfius review will be conducted de novo, meaning it won’t be bound by previous decisions, according to the White House.
Nippon Steel and U.S. Steel struck their deal in December 2023, following a monthslong bidding process conducted by the Pittsburgh-based company. U.S. Steel shareholders approved the sale of the company a year ago, though the United Steelworkers union has opposed it.
For Nippon Steel, acquiring U.S. Steel would provide an entry point to the U.S. steel sector, where prices have been higher than many overseas markets. Nippon Steel has struggled for years in its home market with falling steel demand and anemic prices.
Both Trump and Biden had opposed the deal over the past year. Since taking office, though, Trump has encouraged Nippon Steel and U.S. Steel to restructure their deal so that the Japanese company would invest in the U.S. steelmaker, without fully owning it.
Nippon Steel executives said they would discuss options with the U.S. government, but that large capital expenditures would only be possible if the Japanese firm could invest in equity. Nippon Steel has said that a joint venture with U.S. Steel wasn’t appealing, since that would limit the Japanese company from fully deploying its technology and operational strategies.
“Regardless of how much scrutiny the proposed USS-Nippon deal receives, it does not alter the urgent threat it poses to our national and economic security, the long-term future of the steel industry or our members’ jobs,” said Dave McCall, president of the United Steelworkers.
By launching another review of the deal the Trump administration would be able to fashion its own security agreement with Nippon Steel. A second review also would help the Trump Justice Department defend the companies’ allegations that the deal wasn’t given adequate consideration, analysts said.
“I think this is more pro-Nippon than negative,” said Elena McGovern, managing director for Washington-based Capstone, a national security and business policy consulting firm.