Trump Effectively Approves Nippon Steel's Acquisition of U.S. Steel... Signs Executive Order

Donald Trump, President of the United States, signed an executive order on the 13th (local time) effectively allowing Nippon Steel’s acquisition of U.S. Steel, as reported by AP and others.

The executive order modifies the prohibition imposed during President Joe Biden’s administration, stating that the acquisition would be permitted if certain conditions, including a National Security Agreement (NSA), are met, on the logic that such conditions would sufficiently address security concerns surrounding Nippon Steel’s acquisition of U.S. Steel.

Subsequently, U.S. Steel and Nippon Steel released a joint statement saying, "President Trump has approved the historic partnership between our two companies," and, "regarding the executive order, we have entered into a National Security Agreement with the U.S. government." They also added that since all other regulatory approvals have been obtained, the partnership is expected to be established quickly.

They further stated their gratitude for "President Trump and his administration’s bold leadership and strong support," and expressed expectations for the fulfillment of promises to "make U.S. manufacturing great again."

According to Nikkei, Nippon Steel signed a National Security Agreement with the U.S. government immediately after President Trump’s announcement of the executive order.

The agreement stipulates that Nippon Steel will invest about $11 billion (approximately ₩15 trillion) into local steel facilities by 2028 and that the U.S. government will be granted a 'golden share,' giving it veto power over key managerial decisions.

President Trump had stated the previous day, “We have the golden share,” and asserted that the U.S. has "complete control."

Other specific terms of production and trade contained in the security agreement have not yet been disclosed. However, according to NHK, conditions such as not relocating U.S. Steel’s headquarters overseas are also likely included.

The Japanese government has expressed welcome for President Trump’s executive order. Yoji Muto, Minister of Economy, Trade and Industry, stated, “(This executive order) will add momentum to innovation in the steel industries of both Japan and the U.S., and lead to strengthening Japan-U.S. cooperation."

Based on this executive order, Nippon Steel plans to acquire 100% of U.S. Steel’s shares and make it a subsidiary as initially planned. An executive from Nippon Steel told Yomiuri Shimbun that even with the golden share granted to the U.S. government, “Since it carries no voting rights, management autonomy is secured.”

Previously, Nippon Steel proposed acquiring U.S. Steel for $15 billion in December 2023, but the plan faced opposition from the steelworkers’ union and was blocked by then-President Biden.

After taking office, President Trump ordered a review of President Biden’s prohibition last April, and received a report last month, on the 21st, from the Committee on Foreign Investment in the United States (CFIUS), which had discussed the matter.

Choi Su-jin, Hankyung.com reporter naive@hankyung.com