President Trump escalated his opposition to Nippon Steel’s takeover of U.S. Steel on Thursday, suggesting his tariff policies have made the $14 billion deal redundant—a stance that contradicts his administration’s recent moves to reconsider the transaction.
Key Developments:
🗣️ Trump’s Stance:
“U.S. Steel will do very well thanks to tariffs—why do they even need a deal?”
Proposed Nippon should build a new U.S. plant instead of buying the company.
Left door open for minority investment, but rejected full foreign ownership.
📉 Market Reaction:
U.S. Steel shares fell 7% Wednesday after Trump’s initial comments; stabilized Thursday.
Nippon’s $55/share offer now faces major political hurdles.
🔄 Policy Whiplash:
Monday: Trump directed CFIUS to re-review the deal, signaling potential approval.
Thursday: Undercut that effort by touting tariffs as an alternative to foreign investment.
Why It Matters:
Political Football: The deal has been opposed by both Trump and Biden to court Pennsylvania’s union voters.
Legal Battle: U.S. Steel and Nippon sued CFIUS after Biden blocked the merger, calling it politically motivated.
Steel Industry Impact:
Tariffs may boost U.S. Steel’s profits short-term, but modernization needs (a key rationale for the deal) remain unaddressed.
Nippon’s capital could help retool aging plants to compete globally.
What’s Next?
CFIUS Review: A June 5 deadline looms, but Trump’s comments suggest he may override any approval.
Deal Restructuring: Nippon could propose a minority stake to salvage the transaction.
Tariff Dependence: If the deal collapses, U.S. Steel’s future hinges on long-term tariff protection—a risky bet.