Trump Orders CFIUS to Re-examine Nippon Steel's U.S. Steel Acquisition

U.S. President Donald Trump has directed the Committee on Foreign Investment in the United States (CFIUS) to re-examine the proposed acquisition of U.S. Steel by Japan's Nippon Steel. This directive has sparked significant interest and speculation in the market, with investors interpreting the move as a potential green light for the merger.

In a memorandum, Trump stated, "I have directed the Committee on Foreign Investment in the United States to review the acquisition of U.S. Steel by Nippon Steel to assist me in determining whether further action is appropriate." This re-examination brings a glimmer of hope for the approval of the deal, which was previously blocked by the Biden administration on national security grounds.

Nippon Steel welcomed the news, expressing confidence that an objective and fact-based review would demonstrate the benefits of the partnership for the U.S. economy and national security. "We have always believed that a fair and fact-based review would show that our proposed partnership with U.S. Steel would strengthen the U.S. economy and national security," the company stated.

U.S. Steel's spokesperson also expressed optimism, stating that the company looks forward to continuing its close collaboration with President Trump and his administration to complete this significant investment. The re-examination order has been seen by some investors as a signal that the transaction might be approved, reflecting market optimism about the deal's prospects.

The original decision by the Biden administration to block the acquisition was supported by the United Steelworkers union, citing concerns over foreign control of critical industries and the need to protect U.S. workers and domestic supply chains. Nippon Steel and U.S. Steel subsequently filed a lawsuit against CFIUS, alleging political interference and a biased review process aimed at securing votes in Pennsylvania, where U.S. Steel is headquartered.

Trump's order to reopen the review is also seen as a potential step towards improving economic relations with Japan, especially in the context of the highly politicized global steel supply chain. The re-examination comes as the Trump administration seeks to address concerns over foreign investment in critical U.S. industries, with mixed reactions from stakeholders. Some view it as a necessary step to ensure national security, while others see it as a political maneuver aimed at securing support in key states.

The outcome of the re-examination remains uncertain, but it is clear that the decision will have significant implications for both U.S. Steel and Nippon Steel, as well as for the broader steel industry. The re-examination order has reignited investor interest in the potential resumption of the deal, with the market interpreting the action as a potential green light for the merger.