President Donald Trump’s Friday executive order inches Nippon Steel one step closer to a planned investment in U.S. Steel, with the caveat that the Japanese company must follow a “national security agreement” submitted by the federal government.
The terms of the national security agreement weren’t detailed in the order, but U.S. Steel and Nippon Steel said in a joint statement that the agreement lays out that approximately $11 billion in new investments will be made by 2028 and includes giving the U.S. government a “golden share” — essentially veto power to ensure the country’s national security interests are protected.
Former President Joe Biden cited national security concerns in December when he denied the deal before leaving office. During their respective campaigns, Trump and former Vice President Kamala Harris both said they planned to block the acquisition of U.S. Steel.
However, in February, Trump began to try to undo Biden’s actions, saying Nippon would drop its $14.1 billion acquisition of U.S. Steel to make an “investment, rather than a purchase,” according to Post-Tribune archives.
The companies thanked the Trump Administration for supporting the partnership.
“This partnership will bring a massive investment that will support our communities and families for generations to come,” the statement said. “We look forward to putting our commitments into action to make American steelmaking and manufacturing great again.”
Gary Mayor Eddie Melton, who has been supportive of the deal from the beginning, called the investment “a pivotal moment for Gary and steelworkers across Northwest Indiana.”
“This development brings hope to steelmaking communities around the country,” Melton said in an emailed statement. “As the child of a steelworker, I understand firsthand what this means for families who depend on good-paying union jobs.
“This historic partnership with one of our nation’s oldest allies delivers exactly what the American steel industry needs — $11 billion in new investments that will ensure the longevity of our facilities, drive environmental sustainability in the process, and protect careers for the next generation of steelworkers.”
Melton said he’s hopeful that as the details of this partnership emerge, they will provide even greater assurance to workers and their families.
United Steelworkers leadership has remained skeptical of a potentiall deal between the two steel companies for months, and last week, the USW filed an information request about the partnership, saying in a statement that union leadership “have seen nothing credible” about the deal, “including whether it meaningfully differs from Nippon’s initial proposal to acquire U.S. Steel and make it a wholly owned subsidiary.”
“Neither Nippon nor the White House has provided any details on where, exactly, proposed investments will be directed or what kind of accountability or oversight there will be to ensure Nippon makes good on its promises,” said a USW letter to its members. “We also have seen nothing suggesting that Nippon has backed away from its demand that it would be permitted to pull out of promised investments if we exercise our legal rights during negotiations fighting for a fair contract.”
Nippon Steel has never said it was backing off its bid to buy and control U.S. Steel as a wholly owned subsidiary.
In August, it was announced that Nippon Steel would invest $300 million into Gary Works. A Nippon executive later said the company would invest $1 billion into the local facility.
The companies have completed a U.S. Department of Justice review and received all necessary regulatory approvals, according to Trump’s statement.
The order said the draft agreement was submitted to U.S. Steel and Nippon Steel on Friday. The two companies must successfully execute the agreement as decided by the Treasury Department and other federal agencies that are part of the Committee on Foreign Investment in the United States by the closing date of the transaction.
The order signed Friday by Trump said the CFIUS review provided “credible evidence” that Nippon Steel “might take action that threatens to impair the national security of the United States,” but such risks might be “adequately mitigated” by approving the proposed national security agreement.
The order doesn’t detail the perceived national security risk and only provides a timeline for the national security agreement. The White House declined to provide details on the terms of the agreement.
Trump has promised that U.S. Steel will keep its headquarters in Pittsburgh, but the companies offered few details on how the golden share would work and what investments would be made.
Trump said Thursday that he would as president have “total control” of what U.S. Steel did as part of the investment, then he said that the deal would preserve “51% ownership by Americans.” Trump added that he was “a little concerned” about what presidents other than him would do with their golden share, “but that gives you total control.”
The Associated Press contributed.
