US President-elect Donald Trump said on Monday he would “block” Japan’s Nippon Steel’s planned takeover of US Steel, a deal worth $14.9 billion including debt.
“I am totally against the once great and powerful US Steel being bought by a foreign company, in this case Nippon Steel of Japan,” Trump wrote on his Truth Social platform.
“Through a series of tax incentives and tariffs, we’re going to make US Steel strong and great again, and it’s going to happen FAST! As president, I will prevent this deal from happening.”
US Steel contends it needs the Nippon deal to ensure sufficient investment in its Mon Valley mills in Pennsylvania, which it says it may have to close if the sale is blocked.
Days after the US election last month, Nippon Steel said it expected to close its takeover of the company before the end of the year, while US President Joe Biden was still in office.
Biden also opposed the deal, saying it was “vital” that US Steel “remain a domestically owned and operated American steel company.”
The deal is being reviewed by a body headed by Treasury Secretary Janet Yellen that reviews foreign takeovers of American companies, called the Committee on Foreign Investment in the United States (CFIUS).
In September, the Biden administration extended the review, pushing a conclusion on the politically sensitive deal until after the Nov. 5 presidential election.
Nippon, however, was confident of closing the deal by the end of the year.
Nippon Steel’s Nov. 7 earnings presentation said “the transaction is expected to close in … calendar year 2024” pending a U.S. national security review.
“If the situation does not change dramatically, I believe the conclusion will be reached by the end of the year,” Vice President Takahiro Mori told reporters during Biden’s tenure.
Trump will be inaugurated on January 20.
Protectionist policies
During the election campaign, he promised to introduce protectionist economic policies to help American companies, including threats to restart a trade war with the world’s second largest economy, China.
While running for the White House, he specifically promised to block Nippon’s takeover of US Steel, which is headquartered in Pennsylvania, a key political battleground.
Trump’s vice presidential pick JD Vance also led congressional opposition to the takeover in the US Senate, where the deal was criticized by both Republicans and Democrats.
Analysts suggested that Trump’s stance might soften after the election is over, but Monday’s statement indicated that was not the case.
Major Japanese and American business groups urged Yellen not to succumb to political pressure when considering the proposed acquisition.
The steelworkers’ union opposed the deal and criticized an arbitrator’s ruling in September that Nippon proved it could assume US Steel’s labor contract obligations.
However, in September, some US Steel workers rallied in support of the deal, arguing it would help keep plants open.
