Trump Clears Path for Nippon Steel Investment in US Steel

President Donald Trump signed an executive order on Friday paving the way for a Nippon Steel investment in U.S. Steel, as long as the Japanese company complies with a “national security agreement” submitted by the federal government.

The iconic American steelmaker and Nippon Steel said in a joint statement that the agreement stipulates approximately $11 billion in new investments will be made by 2028 and includes giving the U.S. government a “golden share" — essentially veto power to ensure the country's national security interests are protected against cutbacks in steel production.

“We thank President Trump and his Administration for their bold leadership and strong support for our historic partnership," the two companies said. "This partnership will bring a massive investment that will support our communities and families for generations to come. We look forward to putting our commitments into action to make American steelmaking and manufacturing great again.”

The companies have completed a U.S. Department of Justice review and received all necessary regulatory approvals, the statement said.

“The partnership is expected to be finalized promptly,” the statement said.

“The order ensures U.S. Steel will remain in the great Commonwealth of Pennsylvania, and be safeguarded as a critical element of America’s national and economic security,” White House spokesman Kush Desai said.

“They can become public, but it's almost always disclosed by a party in the transaction, such as a company — like U.S. Steel — that is publicly held," James Brower, a Morrison Foerster lawyer who represents clients in national security-related matters, said.

The mechanics of how a golden share would work will depend on the national security agreement, but in such agreements it isn't unusual to give the government approval rights over specific activities, Brower said.

Nippon Steel offered nearly $15 billion to purchase the Pittsburgh-based U.S. Steel in an acquisition that had been delayed on national security concerns starting during Joe Biden’s presidency.

As it sought to win over American officials, Nippon Steel gradually increased the amount of money it was pledging to invest into U.S. Steel. American officials now value the transaction at $28 billion, including the purchase bid and a new electric arc furnace — a more modern steel mill that melts down scrap — that they say Nippon Steel will build in the U.S. after 2028.

The order signed by Trump said the CFIUS review provided “credible evidence” that Nippon Steel “might take action that threatens to impair the national security of the United States,” but such risks might be “adequately mitigated” by approving the proposed national security agreement.

Trump reserves the authority to issue further actions regarding the investment as part of the order he signed on Friday.