Former President Donald Trump recently approved the merger between U.S. Steel and Japan’s Nippon Steel, following the signing of a national security agreement that addresses concerns raised during his predecessor’s administration. President Joe Biden intervened to block the initial sale, saying it posed an unacceptable risk to national security. This move came right before he left office.
During a visit to U.S. Steel’s Irvin Works facility in West Mifflin, Pennsylvania, Trump emphasized the significance of the deal. As a condition of his deal, he promised those steelworkers that Nippon Steel would ensure that U.S. Steel’s blast furnaces would operate at full throttle. This commitment will be for at least 10 years. Plus, he bestowed upon them a gold, custom helmet with his name on it to mark the long-term relationship between the two companies.
This came on the heels of Trump’s announcement over the weekend that he was making a big move to protect the American steel industry. He increased U.S. tariffs on steel imports to 50%. This move emphasizes his administration’s ongoing focus on bolstering homegrown industries from foreign encroachment, including competition from China. The tariffs went into effect as of June 4. This is a notable move within the broader continuing trade discussions with Japan and other key partners.
With growing bipartisan concerns about the merger, in April, Trump directed a national security review of the merger to see if it served national interests. His approval has received several letters of support from legislators of both parties. Instead they have united on the other side, to defend against foreign acquisitions to protect U.S. companies. Introduced by Pennsylvania Senator Dave McCormick, the purpose of the “golden share” was to give the U.S. government the power to appoint or control key board seats. However, the exact parameters regarding how far this reach extends are still under wraps.
In response, Trump went to his new social media site Truth Social and called the merger a “partnership.” He similarly declared that steelworkers would get a $5,000 payout included in the deal. This new incentive speaks directly to labor unions’ concerns about job security. It addresses the negative effects of foreign ownership on U.S. workers.
That acquisition, worth $55 per share, is expected to close by early next week. Trump’s approval marks a significant shift in the administration’s approach to foreign investments in critical industries. Negotiations with Japan continue. Investors are understandably glued to these developments, hunting for clues as to which way the trade winds will be blowing in any impending trade deals.