Nippon Steel Must Be Open to Compromise to Acquire US Steel

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United States President Donald Trump has ordered the Committee on Foreign Investment in the United States (CFIUS) to review the proposed acquisition of US Steel, a major American steelmaker, by Nippon Steel.

The CFIUS must now report within 45 days as to whether the terms of Nippon Steel's proposal are "sufficient to mitigate any national security risks identified by CFIUS." Based on the results of the review, Trump will then determine "whether further action in this matter may be appropriate."

In January, Trump's predecessor, President Joe Biden, issued an executive order to block the deal. At that time, Biden cited concerns that Nippon Steel's acquisition plan could undermine national security.

Before he became president, Trump himself consistently expressed opposition to the acquisition. However, there are some indications that Biden's ban order might be overturned.

Nippon Steel needs to seize this opportunity to seek an understanding of its position. It must tenaciously explain how its acquisition plan will help strengthen the US steel industry, which is the foundation of the American economy and military.

*Then- presidential candidate Donald Trump wears a helmet and joins steel industry workers on stage at a rally in Pennsylvania on October 19, 2024. (©Reuters).*

A Chance to Make It Work

Trump has indicated he would be open to Nippon Steel acquiring a minority stake in US Steel. However, Nippon Steel has not changed its plan to make US Steel a wholly owned subsidiary. Nippon Steel executives also met with US Secretary of Commerce Robert Lutnick earlier in April. At that time, they conveyed their intention to increase capital investment in US Steel after the acquisition. We hope the company will be willing to further compromise to clinch the deal.

CFIUS will hopefully render a fair decision based on the big picture. Nippon Steel and US Steel announced the takeover plan during the 2024 presidential election campaign. As a result, it became a politicized issue. Both major candidates sought to attract the votes of union members opposed to the plan.

The committee should fully take into account that if the acquisition were to take place, it would provide a means to counter China and thereby bolster US national security.

*Smoke rises from US Steel's Edgar Thomson Steel Works. October 25, 2024, in Braddock, Pennsylvania. (©Sankei by Yusuke Hirata).*

Reinvigorating American Manufacturing

The Trump administration aims to revive manufacturing by imposing heavy tariffs designed to attract investment to the US.

Prime Minister Shigeru Ishiba noted this during his April 7 telephone conversation with President Trump. Japan is America's largest foreign investor, and Ishiba expressed concern that one consequence of high tariffs is the reduced investment capacity of Japanese firms. He therefore called for a review of the reciprocal tariffs announced by Trump.

However, on April 9, the Trump administration went ahead with a 24% reciprocal tariff on Japan.

Nevertheless, the Nippon Steel deal shows that Japanese companies remain eager to invest in America despite the tariffs. In calling for their reconsideration, the Ishiba administration should present this as a strong argument on why high tariffs are unnecessary for attracting investment from Japanese companies.