Washington – On Monday, US President-elect Donald Trump announced his plans to block the $14.9 billion takeover of US Steel by Japanese company Nippon Steel. Trump made this announcement on his Truth Social platform, expressing his strong opposition to foreign companies taking over American companies.
In his statement, Trump wrote, “I am totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case Nippon Steel of Japan.” He also added, “As President, I will block this deal from happening and will use tax incentives and tariffs to make U.S. Steel strong and great again, and it will happen quickly.”
US Steel has been struggling in recent years and argued that the deal with Nippon Steel is necessary in order to secure the necessary investment for its Mon Valley plants in Pennsylvania. The company has warned that if the sale is blocked, they may have to shut down these plants.
However, Nippon Steel has remained determined to protect and grow US Steel in a way that reinforces American industry, domestic supply chain resiliency, and national security. In a statement released after Trump’s comments, Nippon Steel said, “We will invest no less than $2.7 billion into US Steel’s facilities, introduce our world-class technological innovation, and secure union jobs to ensure that American steelworkers can continue to manufacture the most advanced steel products for American customers.”
The deal between Nippon Steel and US Steel is expected to close before the end of the year, while President Joe Biden is still in office. However, Biden has also opposed 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, which is led by Treasury Secretary Janet Yellen.
In September, Biden’s administration extended their review of the deal, pushing the conclusion until after the presidential election on November 5. Nippon Steel maintained in a November 7 earnings presentation that they expect the transaction to close in 2024 pending the outcome of the national security review. Vice chairman Takahiro Mori also stated that he believes a conclusion will be reached by the end of the year during Biden’s term in office.
Trump’s opposition to the deal stems from his protectionist economic policies, which he promised to implement during his campaign in order to support American businesses. He specifically targeted the Nippon Steel takeover, which is based in the state of Pennsylvania, a key battleground state in the election. Even after the election was over, Trump’s position on the deal has not changed, as seen in his recent statement.
Although some analysts speculated that Trump’s stance may soften after the election, his statement on Monday proves otherwise. The deal has faced criticism from both Republicans and Democrats, as well as opposition from the steelworkers union. However, in September, some US Steel workers showed their support for the deal, arguing that it would help keep plants open.
Since the announcement of the Nippon Steel takeover, major Japanese and American business groups have urged Yellen not to give in to political pressure when reviewing the acquisition. The steelworkers union has also fought against the deal, but in the end, Nippon Steel was able to prove that they could assume US Steel’s labor contract obligations.
In conclusion, while the deal between Nippon Steel and US Steel may face some challenges and opposition, it is clear that both parties are determined to make it a success for the benefit of American workers and the steel industry as a whole. As the new administration takes office in January, it will be interesting to see how this deal, and others like it, will be influenced by the change in leadership and the proposed protectionist policies.
