Trump’s new strategy for U.S. Steel-Nippon provokes mixed reactions, confusion
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President Donald Trump on Friday suggested that Nippon Steel would no longer buy U.S. Steel as planned, but the Japanese company would instead invest in the symbolically important American business.
The U.S. president mistakenly referred to Nippon Steel as “Nissan,” the Japanese automaker. But it’s Nippon Steel’s bid that generated controversy as both Trump and his predecessor in the White House, Joe Biden, vowed to block the merger.
Nippon Steel “is going to be doing something very exciting about U.S. Steel,” Trump said at a news conference with Japanese Prime Minister Shigeru Ishiba. “They’ll be looking at an investment rather than a purchase.”
It was unclear what the details of the investment would be, but Trump said he would meet with the head of Nippon Steel next week and he would be involved “to mediate and arbitrate.”
Ishiba described the investment as mutually beneficial and said Japanese technology would be provided to U.S. Steel mills.
Reaction in Western Pa.
Pennsylvania Senate President Pro Tempore Kim Ward, R-Hempfield, issued a statement following the announcement: “While we are still waiting to hear the details of the potential investment, this is a positive development and is good news for the future of southwestern Pennsylvania, the steelworkers, and our heritage.”
United Steelworkers International President David McCall said that “our union has had no contact with either company or the administration regarding reports of a Nippon investment in U.S. Steel. However, our concerns regarding Nippon’s continued interest in U.S. Steel remain unchanged.
“Nippon has proven itself to be a serial trade cheater with a history of dumping its products into our markets. While we await the details of the proposed investment, we encourage President Trump to continue safeguarding the long-term future of the domestic steel industry by instead seeking American alternatives. Regardless of what comes next, we will continue our work to protect the best interests of our members and communities.”
Stacy Mays, a retired U.S. Steel worker, had hoped the proposed $14.9 billion acquisition by Nippon could turn things around for the iconic U.S. company. But Biden blocked the deal in January.
Mays greeted Friday’s news with skepticism.
“When I see the money going into improvements, then I’ll believe it’ll be a good thing,” Mays said.
Mays, 71, of East McKeesport, said he worked for 47 years at U.S. Steel sites, including at the Duquesne and Edgar Thomson works.
He recalled the sites being in dire need of upgrades.
“There were times we had stuff held together with duct tape,” Mays said. “You’ve got plants that are close to 100 years old. You got to put money into them.”
Nippon Steel had promised sweeping investments into the properties owned by U.S. Steel when it was looking to buy the American steel giant.
But now that it’s apparently looking to become only an investor, not an outright owner, it’s hard to predict exactly how much the Japanese company would want to pour into the region or what impact the deal would have, said Chester Spatt, a finance professor at Carnegie Mellon University.
Still, Spatt said, he thinks the deal could have “very favorable” outcomes.
“From what I’ve heard, the president said he’d be very open to investment by Nippon Steel in U.S. Steel, just he doesn’t want it to be purchased,” Spatt said. “It seems to me this is arguably not such a huge distinction.”
It still could allow Nippon Steel to bring about the kind of improvements the Japanese company pledged when looking to buy the company, especially if it takes a sizable stake in the company, Spatt said.
Spatt believes investment instead of acquisition would alleviate the national security concerns Biden had cited when he struck down the sale — concerns the professor dismissed as “fiction,” given that Japan is one of the United States’ closest allies.
A deal along the lines of what Trump described would allow for U.S. Steel to remain under American control while reaping the benefits of Nippon’s investments, according to Spatt.
“I think President Trump has signalled a way for the transaction to get his approval,” Spatt said.
Some met the news with confusion.
“I listened to the news conference with the prime minister and President Trump,” West Mifflin Mayor Chris Kelly said. “To me, it was confusing.”
Kelly has been reaching out to both companies and contacts within the U.S. government and at think tanks to try to make sense of Trump’s statements.
In December, Kelly criticized Democratic U.S. Sen. John Fetterman and Democrat Bob Casey, the state’s former senior senator, for their opposition to a U.S. Steel-Nippon deal.
“There’s no national threat,” Kelly said at the time. “That’s bogus.”
Zoe Bluffstone, a spokeswoman for U.S. Rep. Chris Deluzio, D-Aspinwall, said the congressman “will evaluate this when we have the details, which are really important for this kind of thing.”
“He is focused on protecting and growing Western PA steelworker jobs and American steelmaking,” she said in a statement.
The companies still have a federal lawsuit pending in Washington. U.S. Steel and Nippon Steel are challenging the Biden administration’s decision to block the deal.
David Jardini, 61, of Sewickley, a businessman who teaches a course on Pittsburgh steel at Carnegie Mellon University, said the region’s steel facilities are outdated and in serious need of repair, if not outright replacement.
Investments from Nippon, he said, are “nothing but good for Pittsburgh and our workforce and our economy.”
Facilities like Edgar Thomson, the raw steelmaking facility in Braddock, and the Irvin Works, the steel processing plant in West Mifflin, are still competitive, but require expensive upgrades, Jardini said.
An infusion of investment from Nippon, he said, could keep them alive to give jobs to future generations.
Without that investment, according to Jardini, the U.S. Steel sites in the Pittsburgh region — which are among the oldest and least efficient in U.S. Steel’s portfolio — could be among the first to close.
“In the absence of the resources to invest in the Mon Valley, what I would see is they would have to direct their limited resources elsewhere,” he said.
A thriving steel industry in the area also brings management, engineering and sales jobs — not just jobs in the steel mills themselves, he pointed out.
“On balance, I’ve always thought this was an excellent outcome for U.S. Steel, the merger with Nippon,” Jardini said. “If you accomplish the same thing without the formal merger of the two organizations, that works for Pittsburgh as well.”
No consensus
Nippon Steel made its bid to buy U.S. Steel in December 2023, creating a sudden political issue in the 2024 presidential election as the Pittsburgh-headquartered steelmaker was key to the identity of the political swing state of Pennsylvania. Biden agreed with the United Steelworkers, the labor union, in seeking to block the merger, while Trump as a candidate said outright he opposed the purchase.
In December, the Committee on Foreign Investment in the United States, known as CFIUS, sent its long-awaited report on national security concerns about the merger to Biden.
But the government panel failed to reach a consensus as to whether there were national security issues, leaving the decision to President Biden. On Jan. 3, Biden blocked the sale.
Yet the Biden administration extended a deadline for Nippon Steel to abandon the deal, essentially giving Trump the choice on what step to take next.
The Associated Press contributed to this report.
Correction: An earlier version of this story misidentified the retired steelworker from East McKeesport who reacted to news about Nippon Steel possibly investing in U.S. Steel instead of acquiring it.