The recent announcement by US President-elect Donald Trump to “block” the proposed takeover of US Steel by Japanese company Nippon Steel has caused quite a stir in the business world. Trump took to his new social platform, Truth Social, to voice his strong opposition to the $14.9 billion deal, stating that he is “totally against the once great and powerful U.S. Steel being bought by a foreign company.”
Through a series of tax incentives and tariffs, Trump has promised to make US Steel “strong and great again” and ensure its growth and success in the American market. The President-elect has made it clear that as the leader of the country, he will not allow this deal to go through.
However, embattled US Steel has argued that the takeover by Nippon Steel is necessary for the company’s survival and growth. The Japanese company has pledged to invest $2.7 billion into US Steel’s facilities, introduce technological innovations, and secure union jobs, all for the benefit of the American steel industry.
In response to Trump’s comments, Nippon Steel has stated that they are “determined to protect and grow US Steel in a manner that reinforces American industry, domestic supply chain resiliency, and US national security.” They have also emphasized their commitment to keeping US Steel an American-owned and operated company.
The proposed takeover has been met with opposition not only from Trump, but also from US President Joe Biden. The current administration has also expressed concerns about the deal and its impact on US national security. The Committee on Foreign Investment in the United States, headed by Treasury Secretary Janet Yellen, is currently reviewing the deal and has extended their review until after the election.
In a recent earnings presentation, Nippon Steel stated that they expect the deal to close before the end of the year. However, with Biden still in office, it is uncertain whether the deal will be approved. In an interview with reporters, Nippon Steel vice chairman Takahiro Mori stated that he believes a decision will be made before the end of the year, while Biden is still in office. Trump will be inaugurated as the President on January 20.
Trump’s opposition to the deal is in line with his protectionist policies, which he has promised to implement in order to support American businesses. During his campaign, he even threatened to restart a trade war with China, the world’s second-largest economy. In this context, Trump’s promise to block Nippon’s takeover of US Steel comes as no surprise.
The deal has also faced criticism from both Republicans and Democrats in the U.S. Senate, with Trump’s vice presidential pick JD Vance leading the opposition. However, some analysts had predicted that Trump’s stance on the deal may soften after the election, but his recent statement indicates otherwise. This has raised concerns about the potential impact of his protectionist policies on foreign investments in the United States.
Japanese and American business groups have also urged Yellen not to give in to political pressure when reviewing the proposed acquisition. The steelworkers union has also been vocal in their opposition to the deal, citing concerns about job security. However, in September, some US Steel workers showed their support for the deal, arguing that it would help keep plants open.
The proposed takeover of US Steel by Nippon Steel has stirred up a debate about the potential impact of foreign investments on American companies and jobs. While Trump’s opposition to the deal may be seen as a move to protect American interests and boost the nation’s economy, it also raises questions about the future of foreign investments in the United States. As the review of the deal continues, it remains to be seen what decision will be made and how it will shape the future of the American steel industry.
