Trump Approves $11 Billion Nippon Steel Investment in U.S. Steel

President Donald Trump has signed an executive order clearing the path for Nippon Steel to invest in U.S. Steel, provided the Japanese company adheres to a “national security agreement” submitted by the federal government. The order, signed on Friday, does not detail the specific terms of the national security agreement. However, a joint statement from U.S. Steel and Nippon Steel revealed that the agreement includes approximately $11 billion in new investments by 2028 and grants the U.S. government a “golden share,” which essentially gives the government veto power to protect national security interests against any cutbacks in steel production.

The two companies expressed gratitude to President Trump and his administration for their support, highlighting that the partnership will bring significant investment to support communities and families for generations. They also mentioned that the partnership is expected to be finalized promptly, as they have completed a U.S. Department of Justice review and received all necessary regulatory approvals.

While the companies offered few details on how the golden share would work or how the $11 billion would be spent, White House spokesman Kush Desai emphasized that the order ensures U.S. Steel will remain in Pennsylvania and be safeguarded as a critical element of America’s national and economic security. James Brower, a lawyer who represents clients in national security-related matters, noted that such agreements with the government are typically not disclosed to the public, particularly by the government, but can become public if disclosed by a party in the transaction.

Nippon Steel’s original bid to buy U.S. Steel, valued at $55 per share, 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 that Nippon Steel will build in the U.S. after 2028.

Nippon Steel had pledged to maintain U.S. Steel’s headquarters in Pittsburgh, put U.S. Steel under a board with a majority of American citizens, and keep plants operating. It also said it would protect the interests of U.S. Steel in trade matters and would not import steel slabs that would compete with U.S. Steel’s blast furnaces in Pennsylvania and Indiana. Despite these assurances, Biden blocked the transaction on his way out of the White House. However, Trump expressed openness to working out an arrangement once he returned to the White House in January.

Trump stated that as president, he would have “total control” of what U.S. Steel did as part of the investment. He mentioned that the deal would preserve “51% ownership by Americans,” although Nippon Steel has never backed off its stated intention of buying and controlling U.S. Steel as a wholly owned subsidiary. Trump also expressed concern about what future presidents might do with their golden share, but emphasized that it gives him total control.

The proposed merger had been under review by the Committee on Foreign Investment in the United States (CFIUS) during the Trump and Biden administrations. The order signed by Trump on Friday stated that 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. The order does not detail the perceived national security risk and only provides a timeline for the national security agreement. The White House declined to provide details on the terms of the agreement.

The order said the draft agreement was submitted to U.S. Steel and Nippon Steel on Friday. The two companies must successfully execute the agreement as decided by the Treasury Department and other federal agencies that are part of CFIUS by the closing date of the transaction. Trump reserves the authority to issue further actions regarding the investment as part of the order he signed on Friday.