Trump Brokers Compromise For Japanese Investment In U.S Steel, Avoids Acquisition

President Donald Trump announced that Japan’s Nippon Steel would invest heavily in U.S. Steel rather than purchase the company, reversing a $14.9 billion takeover proposal blocked by the Biden administration.

In early January, then-President Joe Biden blocked Nippon’s bid for U.S. Steel over “national security concerns,” reported CNBC.

President Biden said at the time that the acquisition “would place one of America’s largest steel producers under foreign control and create risk for our national security and our critical supply chains.”

Although President Trump agreed with Biden’s decision, Friday’s announcement comes as what Trump deems a mutually beneficial compromise between both sides, “They’ll be looking at an investment rather than a purchase. … They’ve agreed to invest heavily in U.S. Steel, as opposed to own it.”

Japanese Prime Minister Shigeru Ishiba affirmed that Nippon would provide technology to improve U.S. manufacturing, saying, “It is not one sided. It will be reciprocal, it will be mutually beneficial.”

U.S. Steel’s share price dipped by nearly 6% to close at $36.98 after the president’s remarks, likely due to expectations of reduced Nippon investment compared to the initial $14.9 billion plan.

The specifics of the deal are unclear, with Trump saying that he will meet with executives on both sides “to mediate and arbitrate” terms next week.

Both Nippon and U.S. Steel have pressed to overturn the initial block on the acquisition in court, contending the previous administration’s decision exceeded its constitutional limits.

Though Nippon is pivoting from a complete takeover to a significant capital injection, legal challenges remain regarding the government’s previous injunction, potentially affecting the timeline of any finalized arrangement.

Meanwhile, Cleveland-Cliffs continues to show interest in a possible purchase, with sources indicating that it discussed joining forces with another major steel producer to present a competitive offer in the high-$30-per-share range.

Nippon’s initial plan was to offer $55 per share, placing a premium on the stock. Should a fresh proposal from Cleveland-Cliffs materialize, it may include the divestiture of key U.S. Steel assets, although specifics have yet to be confirmed. Players in the steel industry are closely monitoring shifting negotiations while awaiting potential federal responses to any new bids.