Trump Approves U.S. Steel-Nippon Deal, Sparking Controversy
Former President Donald Trump has given the green light to the U.S. Steel and Nippon Steel merger, despite prior objections and ongoing concerns about national security and the future of American steel production.
Trump’s Approval and the “Golden Share”
On Friday, Trump authorized the U.S. Steel and Nippon Steel partnership via executive order after the companies entered a national security agreement. The agreement grants the U.S. government a “golden share,” which gives it certain powers. The specifics of these powers remain vague, with the companies declining to provide details.
The companies released a joint statement revealing that regulatory approvals have been secured, and the partnership is expected to conclude soon. The agreement demands that Nippon invest $11 billion by 2028, including initial funding for a new project slated for completion after 2028.
Trump stated that the golden share provides the president with “total control
,” though he didn’t elaborate. However, Pennsylvania Senator Dave McCormick mentioned last month that this share would give the government control of some board seats.
Shifting Stance and Political Context
During the 2024 presidential campaign, Trump resisted the sale of U.S. Steel to Nippon. Both Republican and Democratic parties have advocated for protecting U.S. companies from foreign rivals.
However, after assuming office, Trump began to soften his resistance, ordering a review of the deal in April. During his final days, President Joe Biden blocked the sale, citing national security concerns, despite Japan being a key ally.
Trump has avoided referring to the deal as a merger, calling it a “partnership
” on his social media platform. He insisted that U.S. Steel would stay “controlled by the USA” during a speech at a company plant on May 30. U.S. Steel had previously clarified it would become a “wholly owned subsidiary” of Nippon North America.
Investor and Worker Concerns
The president’s description of the deal as a “partnership” caused confusion amongst investors and union leadership. Trump told U.S. Steel workers that Nippon would be a “great partner.” The administration is engaged in trade talks with Japan.
Trump declared that Nippon had committed to keeping U.S. Steel’s blast furnaces running at full capacity for a decade. Furthermore, he promised no layoffs or outsourcing, and a $5,000 bonus for employees. He also announced the doubling of U.S. tariffs on steel imports, which took effect on June 4.
The global steel market is highly competitive. China’s steel production far exceeds other countries; in 2023, China produced over 1 billion metric tons of crude steel, demonstrating its dominance in the industry. (Source: Statista)
