Trump backs US Steel–Nippon ‘partnership’, triggers US steel share rally

In a dramatic reversal, US President Donald Trump on Friday signalled conditional support for Japan-based Nippon Steel’s $14.9 billion bid to acquire United States Steel Corp., calling it a “planned partnership” that would preserve the firm’s American identity, spark a wave of industrial investment, and generate tens of thousands of jobs.

Announced via Trump’s Truth Social platform, the statement marks a pivotal moment in a contentious months-long battle over the future of the iconic US manufacturer. Though details remain scarce, Trump’s endorsement was widely interpreted as a green light for the merger, sending US Steel shares soaring 21 per cent to $52.01 and rising further in after-hours trading, close to the $55-per-share bid Nippon first offered in December 2023.

New terms, same deal?

Trump’s message emphasised that the company would “remain in America”, retain its headquarters in Pittsburgh, and receive at least $14 billion in investment from Nippon Steel over the next 14 months. He also claimed the partnership would create a minimum of 70,000 jobs.

While Trump avoided using the word ‘approval’, his rhetoric marked a significant departure from previous opposition. Both he and former President Joe Biden had earlier expressed resistance to full foreign ownership of US Steel, citing national security concerns. Biden formally blocked the deal in January before leaving office, and Trump ordered a second national security review in April, led by the Committee on Foreign Investment in the United States (CFIUS), which concluded this week.

Media reports suggest that a standalone board, comprised mostly of American citizens, would govern its North American operations, overseen by federal regulators. Nippon has pledged major upgrades to mills in Indiana and Pennsylvania and proposed building a new plant at a yet-undisclosed location.

The full ownership structure remains undefined, and negotiations are ongoing. Nevertheless, Trump is expected to tout the agreement at a campaign-style rally scheduled for May 30 at US Steel’s Pittsburgh facility.

Union resistance lingers

Despite the positive market response, strong resistance persists among organised labour. The United Steelworkers union (USW), which represents workers at US Steel plants across the Rust Belt, reiterated its opposition, citing Nippon Steel’s past history of undercutting US markets through cheap imports and trade law violations.

“Our concern is still that Nippon, as a foreign company with a long and successful history of breaking our trade laws, will further degrade domestic steelmaking,” USW President David McCall said in a prior statement. The union has demanded deeper commitments on job protections and American control.

Nippon has attempted to ease concerns by pledging not to lay off workers or close any plants before 2026 and by committing to honour existing labour contracts.

Strategic stakes

Beyond business, the deal carries significant geopolitical weight. Nippon’s acquisition bid is part of a broader push to offset declining demand in Japan by expanding global operations. For US Steel, the deal provides a financial and operational lifeline after years of underinvestment and shrinking market share.

Pending final regulatory documentation and stakeholder negotiations, the transaction could close before the June 18 deadline. If finalised, it would mark one of the largest industrial takeovers in US history and set a powerful precedent for foreign investment in America’s core manufacturing sectors.

(With inputs from agencies)