Approval of Acquisition by Nippon Steel: Deal Opens New Doors for Japan-U.S. Cooperation

Editorial

16:37 JST, June 15, 2025

A major industry restructuring, which had been buffeted by U.S. politics, is finally set to happen. This deal is likely to make a mark on industrial history and become a new symbol of cooperation between Japan and the United States. The constructive decision by the U.S. government is laudable.

In connection with Nippon Steel Corp.’s plan to purchase U.S. steel giant United States Steel Corp., Nippon Steel announced that U.S. President Donald Trump has “approved” the companies’ partnership.

With that approval, Nippon Steel said it is set to complete the buyout by acquiring 100% of the common stock in U.S. Steel for $14.1 billion (about ¥2 trillion) and realize a deal that will make the U.S. company a wholly owned subsidiary.

The companies have signed a National Security Agreement, which is intended to dispel security concerns, with the U.S. government. Under that pact, U.S. Steel will issue to the U.S. government a “golden share” that allows Washington to veto key decisions even though it holds a minority stake.

Steel is the foundation of manufacturing, used in a wide range of products such as automobiles, infrastructure and military equipment.

China, which has become a “factory for the world,” has overproduced products, including steel, and launched an export offensive with lower prices. Under such circumstances, it is important for Japan and the United States to deepen their cooperation from the standpoint of economic security. This deal can be said to have resulted in the best possible combination of steelmakers to cooperate on policy toward China.

U.S. Steel is struggling with aging facilities, and its crude steel production has fallen to below 20th in the world. In contrast, Nippon Steel, the world’s fourth-largest steelmaker, boasts advanced technology in high-strength steel sheets for automobiles and thick steel plates for shipbuilding, among other products.

If Nippon Steel provides U.S. Steel with technology and funding, doing so could help the U.S. company regain its competitiveness. It is also highly significant for Nippon Steel to establish a foothold in the United States, which is a massive market.

U.S. Steel was once the world’s largest steel company and a prestigious firm that represented the United States’ prosperity.

In some ways, it is understandable that there was resistance among U.S. citizens to the acquisition of such a firm by a Japanese company.

Under these political circumstances, Trump initially called for blocking the planned acquisition, and former U.S. President Joe Biden also issued an order to halt the deal.

Trump has consistently emphasized that U.S. Steel is an American company. It is groundbreaking that he has shown understanding for overcoming this matter by acquiring the golden share.

Nippon Steel has promised to invest $11 billion by 2028. If U.S. Steel continues to grow, there may be no need for the U.S. government to exercise the rights of the golden share.

Trump has imposed high tariffs indiscriminately with an aim of bringing manufacturing back to the United States. However, attracting investment and securing jobs in this way is the best possible approach that should be pursued.

(From The Yomiuri Shimbun, June 15, 2025)