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| Nippon Steel |
Potential Reversal of Biden’s Block on the Merger
President Donald Trump has directed the Committee on Foreign Investment in the United States (CFIUS) to reassess Nippon Steel’s proposed acquisition of U.S. Steel. This move has renewed optimism that the deal, previously blocked by former President Joe Biden, could receive approval.
"I direct the Committee on Foreign Investment in the United States ... to conduct a review of the acquisition of U.S. Steel by (Nippon Steel) to assist me in determining whether further action in this matter may be appropriate," the presidential memo stated.
Following the announcement, shares of U.S. Steel surged nearly 14%, while Nippon Steel's stock saw a nearly 10% rise in Tokyo trading. Investors interpreted the review as a potential green light for the merger, which Biden had blocked on national security grounds in January.
Industry Reactions and Market Impact
Nippon Steel responded positively to Trump’s directive, emphasizing confidence in the deal's benefits. "We have been confident from the outset that an objective, fact-based review of our proposed partnership with U.S. Steel will show that it strengthens American economic and national security," the company said in a statement.
U.S. Steel also welcomed the move. "We look forward to continuing to work closely with President Trump and his administration to finalize this significant and important investment," a company spokesperson stated.
Meanwhile, Japan’s Industry Minister Muto Yoji declined to comment on whether the merger was discussed in a call between Trump and Japanese Prime Minister Shigeru Ishiba. Ishiba is currently working to reverse U.S. tariffs on Japanese goods.
Legal and Political Implications
After Biden blocked the acquisition, both Nippon Steel and U.S. Steel sued CFIUS, claiming the decision was politically motivated. They argued Biden opposed the merger during his 2024 campaign to gain support from the United Steelworkers union in Pennsylvania, where U.S. Steel is headquartered.
The Biden administration defended its stance, citing national security concerns, including risks to infrastructure and supply chains. However, last month, the Trump administration filed a motion to extend deadlines in the lawsuit to allow more time for merger negotiations.
On Monday, the government and the two companies requested an appeals court to pause the litigation until June 5. They noted that CFIUS’s renewed review could "fully resolve" their legal dispute.
With the Trump administration's reassessment underway, investors and industry stakeholders are closely watching the outcome of the review, which could reshape the future of the American steel industry.
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