Trump vows to kill Nippon Steel bid to buy U.S. Steel

SEOUL, South Korea — In a development likely to embarrass Japanese Prime Minister Shigeru Ishiba, President-elect Donald Trump has dealt what may be a mortal blow to Nippon Steel’s proposed $13 billion buyout of U.S. Steel.

Though the deal has won the backing of many in the United States commercial sector, political opposition in the U.S. has been strong. That opposition appears to have won out despite a personal intervention by Mr. Ishiba — and despite Japan’s status as a key ally and the biggest single investor in the United States.

Mr. Trump wrote on social media that he was “totally against the once great and powerful U.S. Steel being bought by a foreign company, in this case, Nippon Steel of Japan. Through a series of tax incentives and tariffs, we will make U.S. Steel strong and great again, and it will happen FAST.”

Having previously expressed his opposition to the sale of what was once the world’s greatest steelmaker, Mr. Trump wrote Monday, “As president, I will block this deal from happening. Buyer beware!”

Nippon Steel’s attempt to acquire its troubled U.S. competitor is a rare policy area where both President Biden and the president-elect converge. With labor unions in the electorally critical state of Pennsylvania lobbying against the deal, the Biden administration put a hold on the buyout and the incoming Trump administration looks set to kill it off.

Long before Mr. Trump’s posting, the takeover of a once-crown jewel of American industry by a Japanese rival had generated pushback, particularly given the opposition of U.S. unions.  

The U.S. Justice Department is undertaking an antitrust investigation of the takeover, while the federal interagency panel that scrutinizes sensitive foreign investments was reviewing the proposed deal on grounds of national security.

But the deal also has received considerable support, including from shareholders worried about U.S. Steel’s future without the promised investment from Nippon Steel. Others who have urged the merger be approved include former Treasury Secretary Larry Summers and former Secretary of Commerce Wilbur Ross, as well as financial institutions such as Morgan Stanley and Bank of America.

Even Mr. Trump’s former Secretary of State Mike Pompeo has argued for the deal in an editorial for The Wall Street Journal.

Nippon Steel is the world’s third-largest steel maker.

A September report by the U.S. Department of Commerce listed Japan as the single largest source of foreign investment in the U.S., with a total of $772 billion — 14.8 percent of all investments made from abroad.

In November, Mr. Ishiba sent a letter to Mr. Biden, personally urging him not to block the acquisition.

The Asahi newspaper reported that Mr. Ishiba argued that the deal would “enable Japanese and U.S. steel companies to combine advanced technologies and increase competitiveness, and contribute to enhancing steel production capacity and employment in the United States.”