WASHINGTON — President Donald Trump announced Friday that U.S. Steel will keep its headquarters in Pittsburgh as part of a “planned partnership,” implying that he will approve a bid by Japan-based Nippon Steel to make a significant investment in the iconic American steelmaker, if not buy it outright.
Nonetheless, Trump’s statement left it unclear whether he is approving Nippon Steel’s bid after promising repeatedly to block the deal to prevent U.S. Steel from becoming foreign-owned.
More recently, Trump suggested that Nippon Steel invest in, rather than buy, U.S. Steel, and one union official suggested on Friday that the federal government will play a role in the company’s management in the future. However, investors appeared to interpret Trump’s statement as a sign that he is approving a merger, sending U.S. Steel’s stock skyrocketing, and both companies issued approving statements.
Nippon Steel described the partnership as a “game changer — for U.S. Steel and all of its stakeholders, including the American steel industry and the broader American manufacturing base.” The United States Steel Corp. “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.”
Nippon Steel’s nearly $15 billion bid to buy U.S. Steel was blocked by former President Joe Biden on his way out of office, and after Trump took office, the Committee on Foreign Investment in the United States conducted another national security review.
In his statement on Friday, Trump said that “after much consideration and negotiation, US Steel will REMAIN in America, and keep its headquarters in the Great City of Pittsburgh.”
What Trump described as a “planned partnership” will add $14 billion to the US economy, he said, though it was unclear what the terms of the deal would be or who would control U.S. Steel under the agreement. On Friday, neither company disclosed how the partnership would be structured.
Japan’s chief tariff negotiator, Ryosei Akazawa, told reporters Friday that he was closely monitoring the situation. He stated that Nippon Steel has made a proposal that could gain support from U.S. Steel and be a profitable investment for both Japan and the United States.
Josh Spoores, the Pennsylvania-based head of steel Americas analysis for commodity researcher CRU, believes that “this ‘partnership’ is a green light for the acquisition.”
U.S. Steel’s stock jumped 21% on the news and continued to rise in after-market trading.
Last year, U.S. Steel’s board of directors and stockholders approved Nippon Steel’s bid. The United Steelworkers union has expressed its opposition. The union had no immediate response Friday.
A union official who defied the United Steelworkers leadership to support Nippon Steel’s bid said Friday that the federal government could play a significant role in the transaction.
“It sounds like the deal has been completed,” said Jason Zugai, vice president of the United Steelworkers union local at U.S. Steel’s Irvin finishing plant near Pittsburgh.
Zugai expressed “relief, happiness, and gratitude.”
He hadn’t seen anything on paper, but his understanding was that Nippon “will make all the profit,” while the federal government will have “a golden chair” that allows it to veto any plans to idle or shut down U.S. Steel plants.
Nippon Steel’s bid to acquire U.S. Steel had always included retaining the company’s headquarters. To sweeten the deal, Nippon Steel offered a $2.7 billion commitment to upgrade U.S. Steel’s two blast furnaces and promised not to import steel slabs that competed with the facilities.
Nippon Steel also promised not to conduct layoffs or plant closures during the term of the current labor agreement, and to protect U.S. Steel’s best interests in trade matters.
Last September, U.S. Steel CEO David Burritt warned that blocking Nippon Steel’s bid would result in the company “largely pivoting away” from investing in its two blast furnaces — one just outside Pittsburgh and one in Gary, Indiana — and raising “serious questions” about remaining headquartered in Pittsburgh.
As recently as December, Trump stated that he was “totally against the once great and powerful U.S. Steel being bought by a foreign company.”
Then, in February, Trump suggested that Nippon Steel would invest in U.S. Steel rather than buy it, as previously planned.
Last month, President Trump directed a new national security review of Nippon Steel’s proposed bid.