Trump Offers Conditional Nod to Nippon Steel’s $14.9B U.S. Steel Deal Amid Security Concerns

In a move that has stirred cautious optimism across financial and industrial sectors, U.S. President Donald Trump has issued an executive order suggesting that Nippon Steel’s $14.9 billion bid to acquire U.S. Steel could move forward, provided specific national security conditions are met. The conditional green light marks a significant shift in tone from earlier resistance and adds a new layer of complexity to a high-stakes deal that has been under intense political and regulatory scrutiny since its announcement in December 2023.

Executive Order Introduces Path for National Security Clearance

President Trump’s executive order, released late Friday, acknowledged that the proposed acquisition—widely viewed as a potential national security risk—could be approved if the two companies adhere to undisclosed terms outlined in the directive. “I additionally find that the threatened impairment to the national security of the United States arising as a result of the Proposed Transaction can be adequately mitigated if the conditions outlined in section 3 of this order are met,” Trump stated in the document. However, the exact contents of section 3, which is believed to contain the mitigation framework, were not publicly disclosed.

Highlights:

• Trump issued an executive order allowing deal progression under specific conditions.

• The conditions for resolving national security concerns remain confidential.

• The order suggests the administration is open to a resolution, pending compliance.

U.S. Steel Shares Climb on Optimism Over Potential Deal Resolution

Following the executive order, shares of U.S. Steel rose 3.5% in after-hours trading, reflecting growing investor confidence that the transaction could be finalized in the near term. The financial markets interpreted the administration’s statement as a clear indication that, despite previous political resistance, a pathway to approval was now on the table. The companies, in a joint press release, expressed gratitude to the administration and revealed new commitments, including $11 billion in fresh investments by 2028 and a governance structure featuring a “golden share” held by the U.S. government.

Highlights:

• U.S. Steel stock surged 3.5% in after-hours trading following the announcement.

• The companies pledged $11 billion in investment and a golden share for the U.S.

• Investor sentiment shifted toward deal optimism despite prior uncertainty.

Golden Share Arrangement Raises Questions Over Future Control

While the joint statement confirmed the issuance of a golden share to the U.S. government, it failed to specify how much influence that share would confer over corporate decisions. This lack of clarity became more pronounced after a Nippon Steel executive, speaking to Japan’s Nikkei newspaper, insisted that the acquisition must include “a degree of management freedom.” This comment contrasted with Trump’s earlier claim that the U.S. would maintain control of the company through the golden share mechanism, sowing confusion over the actual governance framework that would emerge if the deal proceeds.

Highlights:

• Golden Share arrangement is designed to safeguard U.S. strategic interests.

• Nippon Steel insists on maintaining management autonomy post-acquisition.

• Conflicting statements from both parties have created ambiguity around control.

Bipartisan Political Resistance Shaped Early Deal Opposition

The Nippon Steel-U.S. Steel merger has been mired in political controversy from its inception, with both former President Joe Biden and then-presidential candidate Trump expressing firm opposition to foreign ownership of such a strategically critical American company. The deal became a flashpoint in Pennsylvania, where U.S. Steel is headquartered and which remains a key swing state in U.S. elections. In January 2025, shortly before leaving office, Biden formally blocked the merger on national security grounds—a decision that triggered legal action from both companies, who alleged bias in the review process.

Highlights:

• Bipartisan opposition emerged early due to national security and electoral implications.

• Biden blocked the deal in January 2025, prompting lawsuits from the companies.

• Pennsylvania’s political significance heightened scrutiny of the transaction.

Trump Administration Relaunched Review Process with New Parameters

Since taking office on January 20, the Trump administration has approached the deal with greater flexibility, launching a fresh 45-day national security review in April. The new review process was viewed by analysts and company insiders as a potential lifeline for the embattled transaction. While the administration appeared more open to compromise, Trump’s public statements have at times clouded the situation. At a Pennsylvania rally on May 30, he lauded Nippon Steel as a “great partner,” but later backtracked, stating the deal still lacked his formal approval.

Highlights:

• A new 45-day national security review began in April under the Trump administration.

• Trump praised Nippon Steel publicly, then walked back support in later comments.

• The mixed signals have created ongoing uncertainty about the deal’s status.

Legal Timeline Pressures Both Sides to Reach Agreement

With the deal’s acquisition contract set to expire on June 18, pressure is mounting on both companies and the administration to finalize an agreement. On June 5, Nippon Steel and the Trump administration jointly requested an eight-day extension on a pause in ongoing litigation, citing the need for more time to work out a finalized deal structure. The legal pause, which was set to expire Friday, could potentially be extended again depending on how talks progress over the weekend. Should the agreement not be finalized or extended, both parties face renewed legal risk and potential financial setbacks.

Highlights:

• June 18 marks the expiration of the existing acquisition contract.

• A joint request was made for an eight-day extension of litigation pause.

• Legal uncertainty remains unless a final deal is reached or contract terms are revised.

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