One Pittsburgh-based industry expert said he can’t think of any concerns people should have about a deal between U.S. Steel and Japan-based Nippon Steel.
“It’s a massive investment,” said Josh Spoores, head of Steel Americas Analysis at CRU Group. “If we as a country want to restore manufacturing, we need to have competitively priced and plentiful inputs, such as labor, energy, materials, and this allows more steel to be ready for future manufacturing growth.”
The United Steelworkers Union still remains concerned about what Nippon’s involvement in U.S. Steel means, saying much is still up in the air.
“Our core concerns about Nippon Steel — a foreign-owned corporation with a documented history of violating U.S. trade laws — remain as strong and valid today as ever,” said a May 28 union statement, “and that is so whether U.S. Steel and Nippon adhere to the same deal that they have pursued since December 2023 or whether they tweak the terms to satisfy concerns in Washington.”
On May 23, President Donald Trump announced that he would approve an investment from the Japanese company to U.S. Steel. A “planned partnership” would add $14 billion to the U.S. economy, but details of what it entails are still unclear.
If the deal is accepted, the U.S. government would receive “a golden share,” Bloomberg reported this week. With the “golden share,” the government would have de facto veto rights on company decisions and appointments.
The “golden share” seemingly fixes concerns related to national security, which the Committee on Foreign Investment in the United States cited as its reasoning for not supporting the deal. Former President Joe Biden also cited national security concerns in December when he did not approve the deal.
During his campaign, Trump vowed to block the acquisition of U.S. Steel. In February, Trump began to try to undo Biden’s actions, saying Nippon would drop its $14.1 billion acquisition of U.S. to make an “investment, rather than a purchase,” according to Post-Tribune archives.
In a May 23 statement, U.S. Steel supported Trump’s moves to finalize a deal with Nippon Steel.
“U.S. Steel will remain American, and we will grow bigger and stronger through a partnership with Nippon Steel that brings massive investment, new technologies and thousands of jobs over the next four years,” the statement said. “U.S. Steel greatly appreciates President Trump’s leadership and personal attention to the futures of steelworkers and our iconic company.”
A U.S. Steel spokesperson declined to provide additional comment about the potential deal, including about USW concerns. Trump held a rally at the Mon Valley Works–Irvin Plant in West Mifflin, Pennsylvania, outside Pittsburgh, Friday night to laud the deal.
“We’re here today to celebrate a blockbuster agreement that will ensure this storied American company stays an American company,” Trump said as he opened an event at one of U.S. Steel’s warehouses. “You’re going to stay an American company, you know that, right?”
Trump also made news, saying that he was doubling the tariff on steel imports to 50% to protect their industry, a dramatic increase that could further push up prices for a metal used to make housing, autos and other goods. In a social media post later, he added that aluminum tariffs would also be doubled to 50%. He said both tariff hikes would go into effect Wednesday.
“I have to approve the final deal with Nippon and we haven’t seen that final deal yet, but they’ve made a very big commitment and it’s a very big investment,” he told reporters after arriving back in Washington.
In USW’s May 28 statement, the union said closed-door discussions have been had about the deal, but the union has not been included.
Spoores believes union workers will be the biggest winners if the deal between the two steel companies is finalized. Billions of dollars have been promised to union-represented facilities, Spoores said.
“The union is not only keeping jobs, but they should be adding jobs,” he added. “If the union wasn’t involved in this, it was likely that some facilities would have been shut down, so they would have likely lost jobs.
The impact of the government’s involvement with the steel companies is unknown, Spoores said.
“The impact might take a handful of years,” he added. “Maybe in four, maybe in six years, the market in the U.S. for flat rolled steel sheet is potentially moving from a net-importer market to one where we no longer need imports because we built enough capacity in the U.S.”
Micah Pollak, associate professor of economics at Indiana University Northwest, said effects of the potential partnership on Northwest Indiana are still unknown.
“Unfortunately, I do think a lot of the concerns of the deal, especially for Northwest Indiana, have to do with what happens with the contracts that the labor unions have negotiated,” Pollak said. “Will those be preserved? Will they have to renegotiate them? And then, will we see reduced employment in Northwest Indiana?”
Gary Mayor Eddie Melton has been supportive of a deal between Nippon and U.S. Steel for months, citing how it would benefit Gary Works. In August, it was announced that Nippon Steel would invest $300 million into the local facility.
A Nippon executive later said the company would invest $1 billion into Gary Works.
On May 23, Melton said in a statement that he was “extremely pleased” to hear Trump’s announcement confirming a partnership between the two companies.
“As mayor, I facilitated conversations with Nippon Steel and talks with mayors in steelmaking cities and towns from around the country,” Melton said. “I spent months conducting due diligence and listening to the concerns of steelworkers, union leadership and members of the Congressional Black Caucus around the country. I stuck to my guns even when others opposed this deal because I knew it was good for our citizens.”
Although Spoores believes the deal is a win for local unions, Pollak believes they should still be worried because details of the partnership are still unknown and are likely to be for a while.
“If part of the deal is building a new furnace in Pennsylvania, does that mean we will see scaled-down employment in Northwest Indiana as a result?” Pollak asked. “As a result, overall production might stay the same, but maybe we’ll see some shifting.”
Pollak believes the steel deal could be beneficial, but the benefits aren’t black and white.
“There could be a lot of investment in Gary Works, but I also think it could also be a real problem,” Pollak said. “Hopefully some of the details of the deal help with that. Maybe there are some commitments at plants that are in the works that we don’t know about yet.”
The Associated Press contributed.
