CRU: Trump hails a partnership of Nippon with USS

Though interpreted by investors and industry observers that he would approve the Japanese company linking up with US industrial icon, the exact terms of the deal, including how the partnership would be structured and ownership arrangement, remain unclear.

In later comments to reporters, he said: “[U.S. Steel] will be controlled by the United States. Otherwise, I wouldn’t make the deal. It’s an investment and it’s a partial ownership, but it will be controlled by the USA.”

President Trump’s comments came days after the May 21 deadline for the Committee on Foreign Investment in the United States (CFIUS) to complete a review into Nippon’s acquisition of US Steel for $14.9 billion, including assuming $800 million of debt. He has to decide on the proposed combination by June 5.

Nippon has pledged to invest at least $11 billion in US Steel, including $1 billion on a new steel mill and possibly $3 billion more on that plant, as well as keep the company’s headquarters in Pittsburgh.

Tokyo-headquartered Nippon described the partnership as a game changer for US Steel, its stakeholders, the United States’ steel industry and the country’s broader manufacturing base. “We share the Trump administration’s commitment to protecting American workers, the American steel industry, and America’s national security,” it added.

U.S. Steel said it will remain American and grow bigger and stronger through a partnership with Nippon Steel, which brings massive investment, new technologies, and thousands of jobs over the next four years.

Yet President Trump, like his predecessor Joe Biden, had opposed Nippon’s bid, made at the end of 2023. Last December, Trump said he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.” Unions leaders and politicians have also spoken out against the takeover.

The United Steelworkers’ (USW’s) union president Dave McCall said: “Our concern remains that Nippon, a foreign corporation with a long and proven record of violating our trade laws, will further erode domestic steelmaking capacity and jeopardize thousands of good, union jobs.”

However, Jason Zugai, a union official at U.S. Steel’s Irvin finishing plant near Pittsburgh, suggested the central government could take on a major role in the transaction. “It sounds like the deal’s done,” he was quoted as saying in media reports.

His understanding is that Nippon will make all the profit with the government having “a golden share,’’ which allows it to veto any plans to idle or shut down U.S. Steel plants.

President Trump plans to visit U.S. Steel’s operations in Pittsburgh for a rally on May 30.

This article was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.