CNN reported that the information provided in the following paragraphs is taken from their website.
President-elect Donald Trump has once again signaled his intention to block a $15 billion takeover bid of US Steel by a Japanese firm upon assuming office. Trump believes that the former American giant has the capability to stand on its own in the future.
In a statement posted on his Truth Social platform on Monday, he vowed to strengthen and restore U.S. Steel through the implementation of tax incentives and tariffs. He also stated that as President, he would prevent this deal from going through, cautioning potential buyers to be wary.
Nippon Steel, the intended buyer, has expressed its unwavering commitment to safeguarding and expanding US Steel.
In a statement sent to CNN, the company pledged to invest a minimum of $2.7 billion into its unionized facilities. Their goal is to introduce state-of-the-art technological innovations and create secure union jobs for American steelworkers at US Steel. The aim is to enable them to manufacture the most advanced steel products for customers in the United States.
The United Steelworkers union, who previously endorsed Vice President Kamala Harris for president, expressed their support for Trump’s stance against the deal. In a statement, they stated, “The USW welcomes President Trump’s ongoing opposition to Nippon Steel’s acquisition of U.S. Steel, a deal that has significant long-term consequences for U.S. economic and national security.”
USW international president David McCall wrote that President Trump recognizes the crucial role of a robust domestic steel industry in our national security and the significance of the jobs and communities it sustains.
In 1901, a merger between the nation’s top steel companies, including Carnegie Steel Corp, was orchestrated by financiers JP Morgan and Charles Schwab, resulting in the formation of the Pittsburgh-based company. This historic merger made the new company the first in the world to achieve a valuation exceeding $1 billion.
In recent years, US Steel has significantly lagged behind other American steel companies in terms of production and stock market value. The US steel industry, once a powerhouse, now lacks representation among the top 10 largest steel producers worldwide.
In September, Nippon Steel is set to re-submit its application for a national security review by American regulators. This move will give Japan’s largest steelmaker an additional 90 days to finalize its acquisition of a US competitor. The decision to re-file the application stems from political opposition that has arisen during an election year.
The unexpected turn of events gave the steelmakers an opportunity to start over, potentially saving the contentious deal. However, both Trump, who was the Republican presidential nominee at the time, and President Joe Biden and Harris had expressed their disapproval.
The Committee on Foreign Investment in the United States (CFIUS), a group of Cabinet-level appointees that examines all deals of a specific magnitude involving US entities, had been analyzing the acquisition of US Steel for several months due to national security concerns.
CNN has previously reported that the extension of the timeline seemed to be the best outcome, as the White House indicated it would block the deal and CFIUS officials preferred to operate without the pressure of political calendars.
US Steel, facing the possibility of layoffs and mill closures, received a lifeline when Nippon Steel stepped in with a $14.9 billion offer. The offer came after US Steel put itself up for sale following an unsolicited takeover offer from Ohio-based Cleveland Cliffs. Without Nippon Steel’s backing, US Steel would have been forced to make difficult decisions that would have impacted its workforce and operations.
