Trump has announced that he will modify the trading scheme for Nippon Steel & Steelmakers (X.US) to focus on investment rather than acquisition.

On Friday, President Trump announced that he would revise the deal between US Steel (X.US) and Nippon Steel, stating that Nippon Steel would invest in US Steel rather than fully acquire the company. The news caused US Steel shares to plummet 5.83% to close at $36.98.

Nippon Steel had originally planned to buy US Steel for $55 per share in cash, totaling about $12.3 billion. However, Trump did not disclose the specific amount or structure of the revised investment. Nippon Steel declined to comment, and US Steel did not immediately respond.

Over the past few months, politicians from both the Republican and Democratic parties have expressed concerns about the ownership of US Steel, arguing that it involved national security issues. Nippon Steel had committed to investing billions of dollars in US Steel and allowing US management to continue operating its domestic plants, but it was unable to allay the concerns of politicians.

Former President Biden had already vetoed the acquisition agreement in January, and US Steel had then filed a lawsuit in an attempt to overturn the decision.

The deal would have significantly reshaped the US steel industry. As the world's fourth-largest steel producer, Nippon Steel's entry would have given US Steel a stronger competitive edge, while US Steel currently ranks outside the top 20 globally.

After Trump's release of a possible approval of the deal, US Steel's shares initially rose as much as $5 during the day on Friday, but they quickly fell after his statement that Nippon Steel would invest in US Steel.

Moreover, shares of Cleveland-Cliffs (CLF.US) plunged 5.8%. The company had been interested in acquiring US Steel and had made a $35 per share cash and stock offer in August 2023, sparking a bidding war. Now, with US Steel not being acquired by Nippon Steel but accepting investment, Cleveland-Cliffs' competitive position has become more disadvantageous.

Meanwhile, shares of Nucor (NUE.US) and Steel Dynamics (STLD.US) fell 2.3% and 1.7%, respectively. The three companies, along with US Steel, constitute the top four steel producers in the US. One of the main motivations for Cleveland-Cliffs to acquire US Steel was to expand its market share and achieve more stable profits through industry consolidation. However, the current situation may lead to more intense competition.