US President Donald Trump ordered a review into the potential purchase of US Steel by Japan’s Nippon Steel on Monday.
"I direct the Committee on Foreign Investment in the United States ... to conduct a review of the acquisition of US Steel by [Nippon Steel] to assist me in determining whether further action in this matter may be appropriate," said a memo from the president. The security panel should submit a report within 45 days.
Trump previously opposed the purchase of the US firm by Nippon Steel, a $15 billion (€13.7bn) deal blocked by his predecessor Joe Biden in January.
Biden said that there was “credible evidence” that Nippon may threaten US national security after the Committee on Foreign Investment failed to reach a decision on the matter before a December deadline.
“Without domestic steel production and domestic steel workers, our nation is less strong and less secure," Biden said.
In the wake of the White House’s ruling, the two firms subsequently launched two US lawsuits—stressing that the ruling was irrational because of Japan’s status as an American ally.
"Nippon Steel and US Steel have engaged in good faith with all parties to underscore how the transaction will enhance, not threaten, United States national security," the companies said in a statement in January.
Resistance from the United Steelworkers union
Biden was accused of blocking the deal to support a political agenda, namely appealing to protectionist voices across the American Rust Belt.
The takeover notably faced significant resistance from the United Steelworkers union.
This is despite the fact that Nippon Steel had promised to invest $2.7bn (€2.6bn) in US Steel's ageing blast furnace operations in Indiana and Pennsylvania, arguing that it could help the US compete with Chinese competitors.
Without Nippon Steel’s investment, US Steel warned that it would transition to cheaper, non-union electric arc furnaces and move its headquarters away from Pittsburgh.
In the aftermath of the lawsuits, Trump wrote on Truth Social: "Why would they want to sell US Steel now when tariffs will make it a much more profitable and valuable company?"
The post continued: "Wouldn’t it be nice to have US Steel, once the greatest company in the World, lead the charge toward greatness again? It can all happen very quickly!"
Trump nonetheless suggested that he could give Nippon Steel permission to hold a minority share in US Steel.
Talks between Trump and Ishiba
Recent meetings between officials at the Japanese company and the US administration now suggest that the firm may get a sweeter deal.
Nippon Steel said that it was pleased with the news, stating: “We have been confident from the outset that an objective, fact-based review of our proposed partnership with US Steel will show that it strengthens American economic and national security."
US Steel said in an emailed statement: "We appreciate and commend President Donald Trump’s leadership. His action today validates our Board’s bold decision to challenge President Biden’s unlawful order."
The spokesperson continued: "We look forward to continuing to work closely with President Trump and his Administration to finalize this significant and important investment, which will preserve existing jobs, create new jobs, enhance national security and secure a bright future for American manufacturing."
The announcement from the White House came in the wake of a phone call between Japanese Prime Minister Shigeru Ishiba and President Donald Trump on Monday.
The two parties were talking tariffs after the US administration placed a 24% levy on Japanese imports last week, in addition to a 25% rate on vehicles imported from the country. It’s not clear whether Nippon Steel was a topic of conversation.
