Donald Trump Approves the $14.9 Billion Purchase of U.S. Steel by Nippon Steel

After U.S. Steel and Nippon Steel signed a national security agreement with the U.S. Government, President Donald Trump issued an executive order approving the merger of the two companies. According to them, this agreement will give the U.S. Government a “golden share”, but we don’t know how much of it will be under its control.

This historic partnership comes with a commitment to invest $11 billion by 2028. The approval comes after months of obstacles.

The Agreement

On June 13, President Donald Trump issued an executive order. It approved the merger of U.S. Steel with Japan’s Nippon Steel. The deal was finally approved after 17 months of twists and after Joe Biden previously blocked this initiative. Now, Trump has agreed to let the largest steelmaker in Japan buy its U.S. rival.

According to the national security agreement, Nippon Steel must make $11 billion worth of investments by 2028. This also includes initial spending on a greenfield project that must be done later.

“All necessary regulatory approvals for the partnership have now been received, and the partnership is expected to be finalized promptly,” said U.S. Steel and Nippon Steel in a statement.

Although the president did not offer details about the control he has under the golden share, Pennsylvania Sen. Dave McCormick mentioned that this share will let the U.S. Government control several board seats.

Donald Trump Changed His Mind

The new deal might’ve come as a surprise to some people as Donald Trump was not a fan of the sale of U.S. Steel to Nippon during the 2024 election. Both Republicans and Democrats were trying to protect U.S. firms from foreign competitors.

After assuming office, the president ordered a new review of the deal. Previously, Joe Biden had blocked the sale in his last days in office. His reasons included security concerns.

When President Donald Trump approved the deal, he didn’t call it a merger or acquisition, but rather a “partnership”. Despite Nippon Steel buying U.S. Steel, Trump said that the United States will still control U.S. Steel when he delivered a speech to the workers of one of the company’s plants.

According to U.S. Steel, it would only become a “wholly owned subsidiary” of Nippon North America. However, investors were very confused when Trump used the word “partnership” to refer to the deal.

Trade Talks with Japan

The Trump administration is doing trade talks with Japan. In the meantime, investors are waiting for signs that the U.S. will start deals with many partners to avoid massive tariffs, which have been a concern for many. Donald Trump announced that tariffs on steel imports would double to 50% when he was talking to the U.S. steelworkers. The tariffs were applied starting on June 4.

Donald Trump mentioned that the new deal will not lead to layoffs or outsourcing. Instead, workers will get a bonus of $5,000. He also agreed to keep the blast furnaces of U.S. Steel working at full capacity for a 10-year minimum period.