Reactions have been mixed to President Donald Trump's approval of Nippon Steel's acquisition of U.S. Steel, which the Japan-based steelmaker proposed 18 months ago. It surmounted bipartisan political opposition, two national security reviews, legal challenges, union criticism, a major competitor sowing doubt about the odds of it ever happening and a block from former President Joe Biden.
Trump issued a late Friday executive order approving an acquisition by the purchaser Nippon Steel so long as both Nippon Steel and U.S. Steel abided by the terms of a National Security Agreement, such as that $11 billion would be invested in U.S. Steel's operations by 2028, including initial expenditures for a new steel mill.
Nippon Steel has pledged to invest nearly $1 billion in Gary Works, including $300 million to reline Blast Furnace No. 14, a major capital project that would prolong its lifespan for decades.
Gary Mayor Eddie Melton hailed the deal as a "pivotal moment for Gary and steelworkers across Northwest Indiana."
"I’m grateful that the partnership between Nippon Steel and U.S. Steel is moving forward after months of uncertainty," Melton said. This development brings hope to steelmaking communities around the country. As the child of a steelworker, I understand firsthand what this means for families who depend on good-paying union jobs. This historic partnership with one of our nation’s oldest allies delivers exactly what the American steel industry needs — $11 billion in new investments that will ensure the longevity of our facilities, drive environmental sustainability in the process, and protect careers for the next generation of steelworkers."
Nippon Steel pledged to pay U.S. Steel's employees a $5,000 bonus if the deal was approved.
Melton said the world's fourth-largest steelmaker had the deep pockets to put the necessary capital into U.S. Steel's operations, including its flagship mill in Gary.
"Throughout this process, I have worked tirelessly behind the scenes — meeting with federal officials, industry leaders, and labor representatives — to advocate for our community and ensure Gary’s steelworkers had a voice at the table," the mayor said. "I’m hopeful that as the details of this partnership emerge, they will provide even greater assurance to our workers and their families about the bright future ahead. From Gary’s mills to America’s infrastructure, this partnership ensures our region remains the backbone of our nation’s steel industry."
The United Steelworkers union has long opposed the sale of U.S. Steel since filing several trade cases against Nippon Steel over the years for dumping steel in the United States, expressing concerns U.S. Steel would no longer be as active in litigating trade cases meant to protect domestic steel mills and steelworker jobs.
The union said it had not yet received a copy of the new agreement between U.S. Steel, Nippon Steel and the federal government.
"We are disappointed that President Trump has reversed course, jeopardizing the future of American steelmaking by allowing the merger, now described as a 'partnership,' of U.S. Steel and Nippon to go forward despite more than a year of the president speaking forcefully against it," District 7 Director Mike Millsap and International President David McCall said. "Nippon has a long history of violating U.S. trade laws, robbing steelworkers and their communities of tens of thousands of jobs. Trading away the future of a core domestic industry to a corporation with this track record unquestionably threatens our national and economic security."
Union leaders are concerned about the long-term erosion of good-paying union jobs at U.S. Steel's integrated mills like Gary Works and the Midwest Plant in Portage.
"From the beginning of this process, Nippon has steadfastly refused to commit to the union that it would not transfer production from the Mon Valley or the other USS facilities to non-union facilities in Arkansas. It is left to be seen whether the president’s golden share and stated 51% control prevents Nippon from doing what has been clear it would do since December of 2023. Those that ignore the threat, do so at their own peril. The focus of the International union has always been about protecting the members’ job security and employment," Millsap and McCall said. "USS was once a respected corporate leader of the American steel industry. Yet the outgoing CEO and board of directors abandoned that leadership, not due to a lack of resources but rather because of a lack of commitment to the future fueled by unfettered greed."
After bidding $14.9 billion to buy U.S. Steel and running afoul of bipartisan opposition, including from Trump, Nippon Steel sweetened the deal by increasing the proposed investment from an initial $1.4 billion to $14 billion, $11 billion of which it agreed to spend by 2028 and the remainder of which would go to a new steel mill to be built at an undisclosed location. It agreed to maintain U.S. leadership, have a majority of Americans on the board and give the United States government a golden share that would give it control over matters like the number of board seats and production levels.
However, the union is concerned that few details of the renegotiated deal have yet emerged. U.S. Steel for instance is publicly traded and has to open its books to the union and everyone else, while Nippon Steel's North American subsidiary is not listed on the stock market, making its finances more opaque.
"Perhaps the historic USS logo will remain, but it seems it will be no more than a smoke screen to allow a wholly-owned privately held subsidiary of a Japanese corporation to be called American," Millsap and McCall said. "Details matter. Neither the government nor the companies have publicly identified what all the terms of the proposed transaction are. Last week, the publicly identified investments were claimed to be more than $14 billion. This week, that’s dropped to $11 billion. Where are the investments going to be made and can we really count on them? And, while there is a claimed golden share, what can we expect from Nippon’s leadership in Japan which continues to build up overcapacity in steel globally and has been charged again with dumping by the Department of Commerce just weeks ago?"
The union is gearing up for contract talks when the current contract expires in September of next year.
"Rest assured, our union will fight every day to hold Nippon to the investment commitments it claimed were ironclad and to ensure that our members’ employment security, pensions, retiree insurance, and other benefits will remain untouched," Millsap and McCall said.
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