[NEW YORK] President Donald Trump on Monday launched a review of the proposed takeover of US Steel by Japanese rival Nippon Steel, a merger previously blocked by Joe Biden on national security grounds.
“I direct the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of the acquisition of US Steel by the Purchasers to assist me in determining whether further action in this matter may be appropriate,” Trump said in a White House memo to his cabinet.
The revival of the previously blocked deal inspired hopes of the deal now closing, according to media reports, with shares of US Steel (USS) closing up 16 per cent on Monday.
USS said in a statement to AFP that the move by Trump “validates our Board’s bold decision to challenge President Biden’s unlawful order.”
“Today’s decision by President Trump is pivotal as we work to deliver on new and historic levels of investment in American steelmaking,” USS added.
David McCall, president of the United Steelworkers union, spoke out against Trump’s move, saying in a statement: “Regardless of how much scrutiny the proposed USS-Nippon deal receives, it does not alter the urgent threat it poses to our national and economic security, the long-term future of the steel industry or our members’ jobs.”
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Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, said Biden’s opposition to the merger stemmed from union concerns that the two companies would not invest enough to ensure the long-term sustainability of the US steel industry.
“Unless the companies have dramatically revised their offer, and committed to greening the facilities for long-term competitiveness, they and the Trump administration should be worrying about whether they’ll have the social license to operate,” Tucker said.
CFIUS, tasked with analysing the national security implications of foreign takeover of US companies, has 45 days to submit its recommendations to Trump.
The review involves “identifying potential national security risks associated with the proposed transaction and providing adequate opportunity to the parties to respond to such concerns,” according to the White House memo.
US Steel and Nippon Steel announced the proposed US$14.9 billion merger in December 2023, originally meant to close by the end of 2024’s third financial quarter.
However, months of scrutiny by US antitrust authorities and CFIUS – which failed to reach a consensus for its recommendation – forced then-president Biden to make a decision on the deal himself. He blocked the deal in his last weeks in office.
Trump, who said during his 2024 campaign he wanted US Steel ownership to remain in the United States, met with Japanese Prime Minister Shigeru Ishiba in February.
After the meeting, Trump said Nippon Steel would make a major investment in US Steel, but no longer attempt to take over the troubled company. AFP
