Donald Trump has thrown his weight behind a “partnership” between US Steel and Nippon Steel, months after insisting he was “totally against” a $14.9bn bid by the Japanese firm for its US rival.
While the US president stopped short of an all-out endorsement of the takeover, he announced a deal between the two businesses on social media on Friday.
Trump’s predecessor, Joe Biden, had blocked Nippon’s acquisition of US Steel, citing national security concerns, during his final weeks in office. The Trump administration has since been reviewing the proposal.
Under the arrangement announced by Trump on Friday, US Steel would remain in the US, with its headquarters in Pittsburgh, he stressed, announcing plans to hold a “big rally” in the state next week.
“This will be a planned partnership between United States Steel and Nippon Steel, which will create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy,” the president claimed on Truth Social, his social network. “The bulk of that Investment will occur in the next 14 months.”
Shares of US Steel soared 21% as investors interpreted Trump’s post on Truth Social to mean Nippon Steel had received his approval for its long-planned takeover, the last major hurdle for the deal.
US Steel kept rising after-hours and reached $54, just shy of Nippon Steel’s $55-per-share offer price made in late 2023. While no details were released, investors expressed confidence that terms would be similar to those agreed upon in 2023. Investors said that eventually US Steel would no longer be publicly traded and they would receive a cash payout for their shares.
Trump added that the bulk of that investment would occur in the next 14 months and said he would hold a rally at US Steel in Pittsburgh next Friday.
Nippon Steel said it applauded Trump’s decision to approve the “partnership”. The White House did not immediately reply to questions about the announcement.
This week, Reuters reported that Nippon Steel said that if the merger were approved, it would invest $14bn into US Steel’s operations, including up to $4bn in a new steel mill.
The deal has been one of the most highly anticipated on Wall Street after it morphed into the political arena with fears that foreign ownership would mean job losses in Pennsylvania, where US Steel is headquartered. It factored into last year’s election that saw Donald Trump returned to the White House.
The Pennsylvania senator Dave McCormick, who also called the deal a “partnership”, on Friday said it was a “huge victory for America and the US Steel Corporation” that will protect more than 11,000 Pennsylvania jobs, and support the creation of at least 14,000 more.
The United Steelworkers union had urged the president to reject Nippon’s bid, dismissing the firm’s commitments to invest in the US as “flashy promises” and claiming it was “simply seeking to undercut our domestic industry from the inside”.
Trump’s position on Nippon’s approach has shifted significantly. Just in December, he declared he was vehemently opposed to the transaction. “As President, I will block this deal from happening,” he wrote. “Buyer Beware!!!”
By last month, however, he had somewhat softened his stance, stating only that he wanted US Steel to remain in the US. “We don’t want to see it go to Japan,” he said.
For investors, including prominent hedge funds, the news spells relief after more than a year of waiting for a resolution. “There were huge high-fives all around today,” one recent investor said, adding: “We understood Donald Trump’s psyche and we played it to our advantage here.”
Investors said Trump appears to have won ground after the pledge for new investments was increased.
“This deal ensures that steelmaking will live on in Pittsburgh for generations,” another investor said.