WASHINGTON — On Friday, President Donald Trump announced that U.S. Steel will keep its headquarters in Pittsburgh, indicating an emerging “planned partnership” that suggests he may endorse a significant investment from Japan’s Nippon Steel in the renowned American steel company. However, he stopped short of clearly stating whether he would approve a full takeover by the Japanese firm.
Previously, Trump had strongly opposed the potential foreign ownership of U.S. Steel, but his latest comments hinted at a possibility of investment rather than acquisition. A union official remarked that the federal government might gain an influential role in U.S. Steel’s management under this new arrangement. This announcement was positively received in the financial markets, with U.S. Steel’s shares experiencing a surge following the news, and both companies issued positive statements regarding the partnership.
Spanning nearly $15 billion, Nippon Steel’s proposal to acquire U.S. Steel had faced a blockage from former President Joe Biden and was under another national security review during Trump’s presidency. In his recent statement, Trump mentioned, “after much consideration and negotiation, US Steel will REMAIN in America and keep its Headquarters in the Great City of Pittsburgh.”
Describing the collaboration as a transformative event for American manufacturing and the steel industry, Nippon Steel noted that the partnership promises substantial investments, modern technologies, and thousands of new jobs over the next four years. U.S. Steel asserted its commitment to remain American and grow stronger through this alliance with Nippon Steel, although specific deal terms or the future governance of U.S. Steel weren’t detailed.
Josh Spoores, a Pennsylvania-based analyst for steel Americas at the commodity researcher CRU, speculated that this partnership essentially paves the way for an acquisition. Following the announcement, U.S. Steel’s stock spiked by 21%, with further increases during aftermarket trading.
Previously, U.S. Steel’s board and shareholders endorsed Nippon Steel’s offer last year, though it faced opposition from the United Steelworkers union. The union didn’t offer immediate feedback on Friday. Jason Zugai, a vice president of a local United Steelworkers union, expressed optimism, saying that the deal seems finalized. He mentioned the government might wield substantial influence under this new framework, allowing it to veto any plans involving plant shutdowns.
Maintaining U.S. Steel’s Pittsburgh headquarters has consistently been a component of Nippon Steel’s acquisition plan. As part of the proposal, Nippon Steel had committed to a $2.7 billion investment for upgrades, pledged against mass layoffs, and assured not to import competing steel slabs, emphasizing loyalty to U.S. Steel’s interests in trade matters.
David Burritt, U.S. Steel’s CEO, cautioned last year that rejecting Nippon Steel’s offer would necessitate a strategic shift away from crucial investments and potentially jeopardize the company’s Pittsburgh headquarters.
Despite his previous strong opposition to foreign ownership, Trump softened his stance earlier this year, suggesting instead that Nippon Steel might invest in the company rather than acquiring it. Last month saw him ordering a fresh review of Nippon Steel’s proposal, indicating continued scrutiny over national security concerns.