$14bn Nippon Steel-US Steel Tie-up is a Partnership, Trump Says
May 26, 2025
The ‘takeover’ of US Steel appears to have morphed into a ‘partnership’ as part of a bilateral trade deal on tariffs, analysts say.
Nippon Steel logo is displayed at the company's headquarters in Tokyo. Photo: Reuters
US President Donald Trump has said Japan’s Nippon Steel will invest $14 billion in US Steel’s operations – but only get partial control of the American company.
Part of that sum will be up to $4 billion the Japanese firm will put into a new steel mill. Trump said on Friday the merger would create the world’s third-biggest steel producer and some 70,000 jobs.
Pressed for more details of the agreement, Trump said on Sunday: “It will be controlled by the United States, otherwise I wouldn’t make the deal.”
Speaking to reporters as he left for Washington after a weekend at his New Jersey golf club, Trump said relevant lawmakers had pressed him to make the deal.
“It’s an investment and it’s a partial ownership, but it will be controlled by the USA,” he said.
An aerial shot of the US Steel plant in Pittsburgh (Wikipedia image).
Nippon had sought to acquire US Steel last year but the Biden administration formally blocked the deal on national security grounds in January. The idea that the 124-year-old company – once a symbol of US industrial might – would be bought by a Japanese firm became an issue in the 2024 presidential campaign.
But the ‘takeover’ appears to have morphed into a ‘partnership’ as part of a bilateral trade deal on tariffs, analysts say.
The Japan Times said the decision came hours after Trump spoke with Japanese PM Shigeru Ishiba on the phone, as Japan’s chief tariff negotiator Ryosei Akazawa was heading to Washington for a third round of high-level talks.
On Friday, Akazawa met with Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer, it said, but he declined to say whether they had discussed the ‘partnership’ during the meeting.
The company currently has about 22,000 employees, with two-thirds of them in North America.
Company seen going private
The merger would create the world’s third-largest steel producer by volume, following China’s Baowu Steel Group and Luxembourg-based ArcelorMittal, according to World Steel Association data.
While no details were released, investors have expressed confidence that terms will be similar to those agreed in 2023. Investors have said that eventually US Steel will no longer be publicly traded and they will receive a cash payout for their shares.
The deal has been one of the most highly anticipated on Wall Street after it morphed into the political arena with fears that foreign ownership would mean job losses in Pennsylvania, where US Steel is headquartered.
Bid leaves key questions unanswered
Trump’s comments supporting Nippon Steel’s $14.9 billion bid for US Steel left lingering questions about the scope of the deal and its costs for the Japanese firm, leading to muted gains for its shares on Monday.
As part of the deal announced on Friday, Trump said in a post on Truth Social the “planned partnership” between the two companies will add $14 billion to the US economy.
He added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at US Steel in Pittsburgh on Friday.
It is still unclear whether “partnership” refers to the full acquisition of US Steel that Nippon Steel has been pursuing. The White House did not respond to questions about the announcement on Friday.
US Steel shares soared 21% on Friday to $52.01 as investors interpreted the comments from Trump, who had originally opposed the deal, to mean Nippon Steel had received his approval for its long-planned takeover, the last major hurdle for the deal.
But the shares still remain below the $55 per share offered by Nippon, reflecting uncertainty about a deal.
Both US Steel and Nippon Steel, though, lauded Trump’s comments on Friday.
For Nippon Steel, Japan’s top steelmaker, the deal is core to its global expansion strategy. It would lift production to 86 million metric tons from 63 million tons now – at a time when domestic demand is declining.
‘Enormous benefits’
“The benefits of gaining access to the growing US market are enormous,” Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute, said in a note, referring to Nippon Steel.
“Although the company is the world leader in technology, the domestic market is saturated, competition is fierce in Asia, and the company’s growth strategy has turned a corner,” he said, adding Nippon can expect new growth in the US by leveraging its technological strength in high-grade steel.
Costs for a deal were a worry, some analysts said.
“While the news is positive for Nippon Steel’s business development, the increase in spending is worrisome,” Hiroyasu Mori, the head of the investment information office at Okachi Securities, said.
Shares of Nippon, the world’s fourth-largest steelmaker, rose as much as 7.4% to 3,081 yen in Tokyo, but then erased a chunk of the gains to be up 1.7% by mid-afternoon trade.
Reuters with additional input and editing by Jim Pollard
Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.
