Washington — U.S. President-elect Donald Trump has made it clear that he will not allow the once great and powerful U.S. Steel to be bought by a foreign company. In a recent statement on his Truth Social platform, Trump declared that he would block the planned takeover of US Steel by Japanese company Nippon Steel, a deal worth $14.9 billion including debts.
Trump stated, “I am totally against the idea of U.S. Steel being bought by a foreign company, especially Nippon Steel of Japan. As President, I will use a series of Tax Incentives and Tariffs to make U.S. Steel strong and great again, and it will happen quickly.”
The embattled US Steel has argued that it needs the Nippon deal to ensure sufficient investment in its Mon Valley plants in Pennsylvania. The company has warned that if the sale is blocked, it may have to shut down these plants. However, Trump remains firm in his stance against the takeover.
In response to Trump’s comments, Nippon Steel has stated that it is determined to protect and grow US Steel in a way that reinforces American industry, domestic supply chain resiliency, and US national security. The Japanese firm has also promised to invest at least $2.7 billion into US Steel’s unionized facilities, introduce advanced technological innovation, and secure union jobs for American steelworkers.
The deal between US Steel and Nippon Steel was expected to close before the end of the year, while President Joe Biden was still in office. However, Biden has also expressed his opposition to the deal, stating that it is vital for US Steel to remain an American company that is domestically owned and operated.
The deal is currently being reviewed by the Committee on Foreign Investment in the United States, a body helmed by Treasury Secretary Janet Yellen that audits foreign takeovers of US firms. In September, the Biden administration extended their review, pushing a conclusion on the politically sensitive deal until after the November 5 presidential election.
During a Nippon Steel earnings presentation on November 7, it was stated that “the transaction is expected to close in… calendar year 2024” pending a U.S. national security review. Vice chairman Takahiro Mori also told reporters that he believes a conclusion will be reached by the end of the year, during Biden’s time in office. Trump will be inaugurated on January 20.
Trump’s protectionist policies have been a key focus of his campaign, with promises to implement measures to support US businesses and threats to restart a trade war with China. He specifically pledged to block Nippon’s takeover of US Steel, which is based in the crucial political battleground state of Pennsylvania. Even after the election, Trump’s stance on the deal remains unchanged.
The deal has faced opposition from both Republicans and Democrats in the U.S. Senate, with Trump’s vice presidential pick JD Vance leading the congressional opposition. However, analysts had speculated that Trump’s position may soften after the election. Trump’s recent statement has put those speculations to rest.
Despite the pressure from political forces, major Japanese and American business groups have urged Yellen not to give in to political pressure when reviewing the proposed acquisition. The steelworkers union has also been vocal in their opposition to the deal, criticizing a September arbitrators’ ruling that Nippon had proven it could assume US Steel’s labor contract obligations. However, in September, some US Steel workers rallied in support of the deal, arguing that it would help keep plants open.
In conclusion, Trump’s firm stance against the takeover of US Steel by Nippon Steel has sent a strong message to the international business community. With his promises to use tax incentives and tariffs to support American businesses, Trump is determined to make U.S. Steel strong and great again. The fate of this deal now rests in the hands of the Committee on Foreign Investment in the United States, and it remains to be seen if they will succumb to political pressure or prioritize the interests of American workers and national security.
