In an effort to bolster American industry, President Donald Trump has officially endorsed Nippon Steel’s investment in U.S. Steel with a new executive order. The announcement, made on Friday, hinges on Nippon Steel adhering to a national security agreement established by the federal government.
While specific details of this national security agreement were not disclosed in the announcement, U.S. Steel and Nippon Steel issued a joint statement revealing that the agreement consists of approximately $11 billion in new investments to be achieved by 2028. Additionally, it stipulates the provision of a “golden share” to the U.S. government. This measure grants veto power to the U.S. to safeguard its national security interests against reductions in steel production.
“This partnership, a testament to President Trump and his administration’s leadership, signifies a historic investment that will benefit communities and families for generations,” expressed the companies in a shared statement. “We are committed to achieving our goals to revitalize American steelmaking and manufacturing.”
According to their statement, the companies have completed a Department of Justice review and met all required regulatory approvals. They anticipated that the partnership would reach finalization soon. Following the news, U.S. Steel shares rose $2.66, closing at $54.85 in after-hours trading on Friday. Nippon Steel’s initial proposal to acquire U.S. Steel, submitted in late 2023, valued the offer at $55 per share.
Although the partnership disclosed limited aspects regarding the golden share’s operational mechanics or the precise allocation of the $11 billion, White House spokesman Kush Desai emphasized the decision guarantees U.S. Steel’s continued presence in Pennsylvania, preserving its role as a critical asset for America’s national and economic security.
James Brower, an attorney with expertise in national security matters at Morrison Foerster, stated that typically such agreements remain confidential, with disclosure more commonly initiated by transaction parties, such as publicly held entities like U.S. Steel. Brower explained that the golden share’s functionality would be clarified within the national security agreement, which might grant the government approval rights over certain activities.
Notably, U.S. Steel filed no documentation with the U.S. Securities and Exchange Commission on Friday. Nippon Steel initially sought to purchase U.S. Steel with an offer near $15 billion—an acquisition postponed by security concerns during Joe Biden’s presidency. To ease apprehensions, Nippon Steel raised its investment commitment to U.S. Steel. Representing American interests, officials now value this conjunctional effort at $28 billion, including the acquisition and construction of a modern electric arc furnace steel mill following 2028.
Nippon Steel promised to retain U.S. Steel headquarters in Pittsburgh, assign a board with an American citizen majority, and keep operational plants intact. It further pledged to advocate for U.S. Steel in trade affairs and vowed not to import competing steel slabs. Despite Trump’s initial opposition during his campaign, he displayed willingness to negotiate upon returning to office in January.
At a Thursday statement, Trump affirmed he’d possess “total control” over U.S. Steel’s investments as part of this new arrangement. Remarkably, Trump assured the maintenance of “51% ownership by Americans.” However, Nippon Steel reiterated its aim of acquiring full control as a wholly owned subsidiary. Trump also expressed concerns about the future use of the golden share by subsequent presidents while maintaining confidence in his control.
The proposed convergence faced scrutiny from the Committee on Foreign Investment in the United States (CFIUS) during both the Trump and Biden administrations. Trump’s current order acknowledges CFIUS found “credible evidence” suggesting that without proper mitigation, Nippon Steel could pose a risk to U.S. national security. Consequently, Trump’s order recognized potential mitigation through the newly proposed security agreement.
Neither the national security threat specifics nor agreement terms were disclosed within Trump’s order. Details of this agreement were submitted to U.S. Steel and Nippon Steel on the day of Trump’s signing. Compliance with this agreement, as determined by the Treasury Department and other federal agencies within CFIUS, is required for the transaction’s conclusion. Trump maintains authority to administer further action concerning the investment based on Friday’s order.