Trump Clears Way For $14.9 Billion Nippon–US Steel Merger Amid Security Concerns

The green light came through an executive order, which stipulated that the deal could proceed if the two companies reached an agreement with the US Treasury addressing national security concerns.

Nippon Steel is acquiring a full 100 per cent stake in the American firm, according to a company spokesperson in Tokyo.

Source : Freepik

President Donald Trump has officially approved the $14.9 billion acquisition of US Steel by Japan’s Nippon Steel, concluding an 18-month saga fraught with political tension, labour resistance, and national security scrutiny.

The green light came through an executive order signed on Friday, which stipulated that the deal could proceed if the two companies reached an agreement with the US Treasury addressing national security concerns, reported Reuters.

Shortly after, the companies announced that they had signed the required agreement, meeting the conditions of the directive.

“We look forward to putting our commitments into action to make American steelmaking and manufacturing great again,” both companies said in a joint statement, while extending thanks to Trump for his support.

Massive Investment and Governance Commitments

The agreement includes a commitment to inject $11 billion into US operations by 2028. Nippon Steel is acquiring a full 100 per cent stake in the American firm, according to a company spokesperson in Tokyo.

Additionally, there are promises surrounding governance, production, and trade practices, though specific details on the promised "golden share" remain vague. This share, as mentioned by Senator David McCormick of Pennsylvania, is expected to give the US government veto power over key corporate decisions — but how this will be enforced is still uncertain.

The merger not only saves Nippon Steel from paying a $565 million breakup fee that would have been triggered by a failed approval, but also strategically positions the company to benefit from major US infrastructure initiatives. Moreover, the Japanese steelmaker avoids high import tariffs of 50 per cent that currently burden foreign competitors.

Reuters previously reported that Nippon Steel is planning an additional $3 billion investment to build a new mill after 2028, further solidifying its long-term US strategy. As the fourth-largest steelmaker in the world, Nippon sees the American market — particularly in high-grade steel — as central to its international growth ambitions.

Domestic Politics and International Diplomacy at Play

The Japanese government welcomed the outcome, especially as it eyes a broader trade agreement with the US before the upcoming Group of Seven summit. “The government of Japan welcomes the US government's decision, as we believe this investment will enhance innovation capabilities in the US and Japanese steel industries and further strengthen the close partnership between our two countries,” said Yoji Muto, Japan’s Economy, Trade and Industry Minister.

Still, some investors in Nippon Steel are wary of the near-term financial pressure that comes with such a significant investment pledge.

The path to approval has been anything but smooth. Since Nippon Steel announced its takeover bid in December 2023, the proposal encountered resistance from the United Steelworkers union and both political parties. Former President Joe Biden opposed the transaction during his term, citing national security reasons, and blocked it just before leaving office in January. This led to legal action from the two companies, who alleged that the national security review was biased. The Biden administration denied the accusation.

Trump’s return to office provided an opening. His administration initiated a fresh 45-day national security review in April. Although Trump made several ambiguous public statements — sometimes referring to the deal as a general "investment" and other times hinting at a partial acquisition — the companies pressed forward, eventually gaining his endorsement.

With final approvals in place and a massive capital infusion on the horizon, the deal marks a turning point for US Steel, which has long struggled to secure the resources needed to modernise its operations and compete globally.