Trump opposes Nippon Steel’s bid for U.S. Steel: is protectionism on the rise?

Former President Donald Trump recently took to his social platform, Truth Social, to voice staunch opposition to Nippon Steel’s potential acquisition of U.S. Steel, calling it an unacceptable sale to a foreign entity. Trump’s post on December 3, 2024, reads:

"I am 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! As President, I will block this deal from happening. Buyer Beware!!!"

Trump’s declaration has sparked significant debate, not only regarding the future of U.S. Steel but also about the broader implications for international trade and the steel industry.

Current context: Trump’s influence and upcoming presidency

Donald Trump is set to return to office on January 20, 2025, following his recent electoral victory. While he lacks the authority to act on the matter until then, his statements suggest a continuation of protectionist policies reminiscent of his first term. These policies, including tariffs on steel and aluminum imports, prioritized domestic production and national security over globalization.

What’s at stake?

U.S. Steel, historically a symbol of American industrial strength, has faced challenges adapting to a competitive global market. Nippon Steel remains firmly committed to its $15 billion acquisition: "We are close to 100% confident of closing the deal by the end of the year," Nippon Steel Vice Chairman Takahiro Mori told Reuters. 

The acquisition would increase Nippon Steel’s annual production capacity from 65 million to 85 million metric tons. While the company has secured regulatory approvals outside the U.S., it is awaiting decisions from the Committee on Foreign Investment in the United States (CFIUS) and the Department of Justice on antitrust matters.

CFIUS and its role

CFIUS, tasked with assessing foreign investments for national security risks, will be central to the outcome. Given the critical role of steel in infrastructure and defense, the transaction may face heightened scrutiny. A decision is expected later this month.

Broader implications

The Japanese government has strongly supported the acquisition, with Prime Minister Shigeru Ishiba sending a letter to President Joe Biden urging approval.
The move could strain U.S.-Japan economic relations, undermining a long-standing alliance. For the global steel market, this development could amplify existing challenges, including overcapacity, trade imbalances, and the shift toward sustainable production.

A return to protectionism?

Trump’s opposition signals a potential return to protectionist policies to safeguard domestic industries. While such measures may support American companies and jobs, they could deter foreign investment and increase trade tensions.

The outcome of this acquisition will likely shape the steel industry and set the tone for future U.S. trade policies.


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