On December 3, 2024, U.S. President-elect Donald Trump made a strong statement on social media, declaring that he would block the planned acquisition of U.S. Steel by Nippon Steel, a Japanese steelmaker. Trump emphasized that U.S. Steel, a major American manufacturer, should remain under U.S. ownership and vowed to use tax incentives and tariffs to ensure its strength. This marks Trump’s first public comment on the deal since winning a second presidential term.

The Acquisition Deal: In December 2023, Nippon Steel, the world’s fourth-largest steelmaker, reached an agreement to acquire U.S. Steel, one of the largest steel producers in the United States. The combined entity would have a production capacity of 86 million metric tons annually, with U.S. Steel contributing 20 million tons to the total. This acquisition was seen as a way to consolidate the steel industry, but it has faced significant opposition.

Opposition from Unions and Biden: The acquisition has met resistance from various groups, including United Steelworkers (USW), a prominent American labor union. President Joe Biden has also opposed the deal, emphasizing the importance of keeping U.S. Steel American-owned. Biden’s administration has made clear that protecting American jobs and national security is a priority.

The Committee on Foreign Investment in the United States (CFIUS), which evaluates the national security implications of foreign investments, has been reviewing the deal. As of now, no final decision has been made regarding its approval.

Trump’s Stance on National Security: Trump’s objections to the acquisition revolve around the national security risks of allowing a foreign company to acquire a major American steel producer. He stated that he would block the deal as president and use his office’s powers to protect U.S. Steel from foreign ownership, reinforcing his message of “Make U.S. Steel Great Again.” He also promised to strengthen the American steel industry using tax incentives and tariffs, tools he has used previously to protect U.S. manufacturing jobs.

Nippon Steel’s Viewpoint: In response to the criticism, Nippon Steel has argued that the acquisition would revitalize the American Rust Belt, improve U.S. steel production, and even enhance national security. Takahiro Mori, the company’s vice chairman, expressed optimism that the deal could close before Trump assumes office in January. The company believes the merger would lead to a more competitive and efficient steel industry in the U.S., benefiting both the economy and national defense.

U.S. Steel’s Position: David Burritt, the CEO of U.S. Steel, has also defended the acquisition, stating that the sale would enhance U.S. national security and bolster job security within the steel industry. U.S. Steel has struggled with declining stock prices, falling over 15% year-to-date. This decline in stock price has been partly attributed to uncertainty over the potential acquisition. Nippon Steel, too, has seen its stock drop by more than 4% during the same period.

Conclusion: The acquisition of U.S. Steel by Nippon Steel remains highly controversial, with major concerns over national security, labor union opposition, and political influence. President-elect Trump’s latest comments signal a strong stance against foreign ownership of critical American infrastructure, adding more complexity to the deal. The future of the deal hinges on regulatory reviews, political dynamics, and the broader impact on the steel industry.