Trump Vows to Block Japanese Firm’s Controversial Takeover of US Steel

Edited by Evans Momodu
5 minute read

President-elect Donald Trump has reaffirmed his opposition to Nippon Steel’s proposed $15 billion acquisition of U.S. Steel, pledging to block the deal upon taking office.

Trump announced his stance on his Truth Social platform, emphasizing his commitment to revitalising U.S. Steel through "Tax Incentives and Tariffs" to ensure it remains an independent American entity.

"Through a series of Tax Incentives and Tariffs, we will make U.S. Steel Strong and Great Again," Trump wrote. "As President, I will block this deal from happening. Buyer Beware!!"

Nippon Steel’s Response

Nippon Steel, Japan's largest steel producer, has promised to invest $2.7 billion into U.S. Steel’s facilities and to maintain union jobs while introducing advanced technology to enhance the company's competitiveness. 

Union Backing for Trump’s Position

The United Steelworkers (USW) union, despite its endorsement of Vice President Kamala Harris for president, has expressed strong support for Trump’s stance. The USW emphasized the critical role of a strong domestic steel industry in ensuring national security and sustaining union jobs. USW International President David McCall praised Trump for recognising the importance of safeguarding the industry.

Historical and Industry Context

Founded in 1901, U.S. Steel was once a dominant force in the global steel industry but has seen its output and market value decline over the years. No American steelmaker ranks among the top 10 globally. U.S. Steel initiated the sale process last year, citing financial challenges and threats of layoffs, after receiving an unsolicited $7 billion bid from Cleveland Cliffs. The $14.9 billion offer from Nippon Steel emerged later as part of the same sale process.

Regulatory Hurdles

The proposed takeover has faced scrutiny from the Committee on Foreign Investment in the United States (CFIUS), which is reviewing the deal on national security grounds.

Bipartisan opposition, including resistance from Biden, Harris, and Trump, has further complicated the acquisition.

CFIUS recently extended its review period to allow for further evaluation outside the pressures of political deadlines, providing temporary relief to Nippon Steel. However, U.S. Steel has warned that without Nippon’s investment, it could face layoffs and mill closures.

The controversy surrounding this acquisition underscores the broader debate over protecting strategic industries, foreign investment, and the future of American manufacturing.
Source: CNN