US Steel's Glimmer of Hope: Nippon Steel's Trump Meeting and the Path to Recovery

The U.S. Steel Corporation (NYSE: X) has seen its stock price surge 8% this month amid reports of a critical meeting between Nippon Steel executives and Trump administration officials. This meeting, scheduled for next week, could mark a pivotal turning point in the $14.1 billion merger bid that has been stalled since January 2025 due to national security concerns. The outcome of these talks, combined with a high-stakes proxy battle, will determine whether US Steel’s shares continue to climb or face a steep decline.

The Merger’s Regulatory Hurdle and Strategic Shift

The proposed merger, blocked by the Biden administration in January 2025, faces renewed scrutiny under President Trump’s directive for the Committee on Foreign Investment in the United States (CFIUS) to conduct a fresh 45-day review. Nippon Steel has responded by proposing significant concessions, including a $1.4 billion investment in U.S. Steel’s outdated facilities, relocation of its U.S. headquarters to Pittsburgh, and the transfer of 2,000 steelmaking patents to bolster American technological capabilities. These measures aim to address national security fears by demonstrating tangible benefits to U.S. industrial strength.

The meeting’s success hinges on convincing the Trump administration that the deal aligns with “friendshoring” priorities—prioritizing investments from allies like Japan to counter Chinese steel dominance. A favorable outcome could lead to a presidential override of CFIUS’s prior objections, paving the way for the $55-per-share cash offer, which represents a 142% premium over US Steel’s stock price before the merger was announced.

The Proxy Battle: A Vote for the Board, a Vote for the Future

Meanwhile, US Steel’s stockholders face a critical decision at the May 6 Annual Meeting, where they will vote on a proxy contest led by Ancora Holdings Group. Ancora’s slate of directors, accused by US Steel’s management of being aligned with competitor Cleveland-Cliffs, seeks to block the Nippon Steel deal. If successful, this could derail the $55-per-share premium, potentially causing the stock to plummet.

Analysts warn that Ancora’s alternative—potentially a merger with Cleveland-Cliffs—faces antitrust hurdles and offers far less value. US Steel’s current board, backed by over 98% of votes in a prior special meeting, argues that the Nippon deal guarantees $2.7 billion in capital investments, job protections, and a strategic shift toward EV battery materials production.

Stock Performance and Analyst Outlook

The 8% stock surge on May 12 followed reports of progress in Nippon Steel’s talks with Commerce Secretary Howard Lutnick, signaling investor optimism about the merger’s revival. Analysts now project an additional 20% upside if the deal proceeds smoothly, citing the strategic value of the $1.2 billion Texas joint venture for EV battery materials—a sector expected to grow at 15% annually through 2028.

However, risks remain. A delayed CFIUS approval or a victory for Ancora’s proxy bid could push the stock back toward its pre-merger price of around $38.50, nearly $17 below the current $55 offer.

Conclusion: Riding the Steel Wave or Facing the Meltdown?

US Steel’s stock is now a high-stakes bet on two critical outcomes: the May 6 proxy vote and the administration’s regulatory decision. If investors back the current board and the Nippon merger proceeds:
- Stockholders gain a $55-per-share cash windfall, a 142% premium.
- US Steel secures $2.7 billion in capital investments, modernizing its infrastructure and positioning it as a leader in EV battery materials.
- The U.S. gains a strategic advantage in steel production, countering Chinese dominance.

Conversely, a failed merger would leave US Steel’s stock vulnerable to $17+ declines, with Ancora’s risky alternatives offering little assurance.

The numbers speak clearly: $55 vs. $38.50—the difference between a transformative deal and a stagnant future. With the Trump meeting and proxy vote looming, investors must decide whether to bet on US Steel’s revival or brace for a potential meltdown. The steel industry’s next chapter hinges on next week’s outcomes.