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Japanese iron and steel companies and the United States entered last-minute takeover talks. Nippon Steel said it would make large investments in US Steel once the takeover was approved. According to the\u201cJapanese economic news\u201d 21 summary of information, the total investment of Japanese iron may be as high as 14 billion US dollars, significantly more than the previous commitment of 2.7 billion US dollars. The Committee on foreign investment in the US (CFIUS) is due to complete its security review of the deal by May 21 local time, with President Donald Trump due to make a final ruling in early June. Founded in 1901, the U. S. Steel Company has contributed to the industrialization of the United States, but in recent years, poor operating conditions. Some analysts believe that the long-term\u201cPull\u201d of the acquisition reflects the complex impact of U.S. policy on Japanese and other foreign companies investing in the United States, as Japan and the United States are about to open a new round of tariff negotiations, the case has been closely watched.<\/p>\n
\u201cIf American steel had become a Japanese iron subsidiary, it wouldn’t have ended up like this.\u201d<\/p>\n
Japanese NHK said in discussions with the US government that, if the deal is approved in the form of US Steel becoming a wholly owned subsidiary of Japanese steelmaker, the company will make the huge investment. In December, Japanese 2023 announced plans to buy US Steel for more than $14bn, a deal that has barely budged, but investment has multiplied. Local media in Pittsburgh, the headquarters of U. S. Steel Company, revealed Sunday that the investment plan of Japanese iron and steel industry has been greatly increased from 2.7 billion US dollars to 14 billion US dollars. The\u201cOverweight\u201d move was widely interpreted as a compromise to win approval from the Trump administration.<\/p>\n
The deal has been going through ups and downs for more than a year. In January 2025, then-president Biden blocked the takeover on \u201cNational security\u201d grounds before leaving the White House. The Japanese government then backed a lawsuit filed by Nippon Steel and American steel against the Biden administration, accusing it of \u201cIllegal interference\u201d in the takeover. With Donald Trump back in the White House, the tide has turned again. In April, Donald Trump ordered CFIUS to review the case. It is also the first time a US president has asked for a review of a terminated cross-border merger without a court ruling.<\/p>\n
According to the Nihon Keizai Shimbun, CFIUS is a presidential commission that spans a wide range of sectors, including science and Technology, defense, commerce, energy, and justice, responsible for assessing whether foreign takeovers harm us national security. The committee reviews by the principle of unanimity, but may also vote if there is a difference of opinion. Donald Trump will make a final decision within 15 days of the CFIUS report.<\/p>\n
In the latter stages of the acquisition drive, Nippon Steel not only raised its investment, but also pledged to invest about $10bn before the 2028 and $14bn in subsequent years, the report said. That includes billions of dollars in investment in a new steel plant. Japanese steel said the plans had been made clear in communication with the US government.<\/p>\n
Japanese steel is aiming to win Donald Trump’s support by significantly increasing its commitment to US steel investment over the next few years, the Financial Times reported yesterday. The report also quoted people familiar with the matter as saying that Japanese iron promised to add tens of thousands of jobs in the US in the next few years.<\/p>\n
Wang Jia, a Japan expert at the Institute of Economics at the Shanghai Academy of Social Sciences, told the global times that one of the main purposes of Japanese iron and Steel’s acquisition of U.S. Steel is to expand its global market share, to enhance international competitiveness in the steel industry.<\/p>\n
\u201cFirst of all, US Steel is an important US steel producer, and a successful acquisition would significantly increase Japanese Steel’s share of the global steel market and increase its influence in the global steel industry,\u201d Wang said. Second, the acquisition of US Steel can circumvent the risk of US trade protectionism and gain access to the US domestic market. \u201cThrough acquisition, Japanese steel will have direct access to the U.S. market and a local production base and customer network, thereby avoiding high tariffs and reducing the uncertainty caused by trade barriers.\u201d<\/p>\n
US Steel has suffered two consecutive quarters of net losses and continued poor performance through the first quarter of 2025, in spite of its more than 100-year history as a symbol of US industry, according to figures. For this, \u201cIf [ US Steel ] becomes a subsidiary of Japanese iron, it will not be reduced to this,\u201d Mori Takahiro, vice-chairman and executive vice-president of Nippon Steel, told the Japan economic news on the 15th.<\/p>\n
On May 7th Cleveland Cleveland, another American steelmaker, announced that it would temporarily shut down its blast furnaces at six locations across the country because of the continuing downturn in steel prices. The overall market demand is weak, making the steel industry in a serious situation. The US government recently imposed tariffs on steel and aluminium imports, a move that Washington says is intended to\u201cStimulate the return of local manufacturing\u201d but which in the short term has also increased costs in a number of downstream industries, including cars, impact on steel demand.<\/p>\n
Pay a\u201cToll\u201d to break into the US market<\/p>\n
Wang Jia told the global times that if the acquisition of U.S. Steel by Japanese iron and steel is successful, it will significantly enhance the global strategic position of Japanese iron and enhance its long-term competitiveness, so even if the investment is large in the short term, it may also be worth it in the long run.<\/p>\n
Donald Trump’s administration may have been impressed by the surge in investment in Japanese steel, particularly the planned construction of new plants in the US and the promise of direct local job creation. If approved, the extra investment could be seen as a\u201cToll\u201d on access to the US market.<\/p>\n
\u201cBut it is worth noting that if geopolitical risks increase in the future, further protectionist policies by the US government, or another recent shift in policy, will create uncertainty for the acquisition. Moreover, the post-acquisition integration process is complex and expensive, and building a new plant will require a lot of time and additional operating costs,\u201d said Wang.<\/p>\n
In an attempt to break the deadlock during the takeover negotiations, JR has not only raised its investment quota but also formulated a\u201c100-day reform plan\u201d to quickly restructure the US steel business after the acquisition, according to Japanese media reports. Japanese steelmakers claim that a successful takeover would prompt US Steel to introduce its high-end steel manufacturing technology, optimise operational efficiency and make large-scale equipment investments.<\/p>\n
\u201cA number of reforms will be initiated as soon as the acquisition is completed,\u201d Mori said publicly in recent days. \u201cWe are now refining our 100-day plan after the acquisition.\u201d Although Mori gave no details of the talks with the US, but he again stressed that the Japanese iron insisted on the completely subsidiary position. \u201cThere is no free technology,\u201d Mori said. \u201cNow that we have decided to provide high-end steel manufacturing technology ‘Without Reservation’ , companies must also receive a corresponding return.\u201d<\/p>\n
For Japan Iron & Steel, the acquisition of U. S. Steel is a key jigsaw puzzle for its medium-to long-term growth strategy. Although the current poor performance of U. S. Steel, but the Japanese iron and steel forecast that the future of the U. S. Steel market there is hope of recovery, the company’s earnings will improve. If 100 per cent of the deal goes through, US Steel could make a substantial profit contribution of about Y100BN ($700m) to Japanese steel, according to consensus forecasts.<\/p>\n
Some analysts say Japanese steel is trying to send a message to the US that it wants to\u201cRebuild\u201d its business through its own technology and management capabilities, and help the US steel industry rebound.<\/p>\n
Tariff negotiations influence the attitude of investment<\/p>\n
Domestic support for Nippon Steel’s resistance to the takeover has been unrelenting. The Japanese government has always been supportive of the acquisition. In response, the President of the Japan Economic Federation, Masa Shikura, said that what Japanese iron is doing in the United States is exactly what the American government is asking for, it is hard to understand why the US government considers it a\u201cThreat to national security\u201d after spending so much on providing investment, making high-value products and nurturing industrial talent.<\/p>\n
The experience of the setback of Japanese iron purchasing American steel also reflects the complicated situation of the co-existence of cooperation and contradiction in japanese-american Economic and trade relations. According to a report on the NHK website on the 21st, regarding the US government’s tariff measures, japan’s chief trade negotiator, Economic Regeneration Minister Akira Ryo is planning to go to Washington on the 23rd to attend a new round of japan-us tariff negotiations. However, US Treasury Secretary Vincent Besant is expected to be absent from the talks. Akazawa had previously said us tariffs and\u201cReciprocal tariffs\u201d on cars, auto parts, steel and aluminium products were regrettable and that Japan’s demand for the tariffs to be lifted had not changed. He stressed that Japan would not rush into a trade deal that could harm its national interests.<\/p>\n
Kyodo news agency quoted Japan and the United States tariff negotiations, said the United States has refused to withdraw tariffs in the negotiations, the Japanese value of the Auto, steel and aluminum tariffs excluded from the scope of the negotiations; Japan is also considering calling for lower tariffs, given that the US has agreed to lower tariffs on the first 100,000 British cars imported each year.<\/p>\n
In fact, the impact of the US tariffs on the Japanese economy is beginning to be felt. Japan’s exports to the United States fell 1.8 percent in April from a year earlier, the first decline in four months, according to preliminary trade statistics released by the Finance Ministry, Kyodo News Agency reported Tuesday. Car exports fell 5.8 per cent year-on-year. Kyodo analysis said the tariffs imposed by the Donald Trump administration in April may have had an impact.<\/p>\n
At present, Japanese public opinion is not optimistic about the prospects of negotiations. Japan’s\u201cYomiuri Shimbun\u201d released a poll on the 18th that showed that 73% of respondents are\u201cUneasy\u201d about the future of japan-us relations against the background of the US government’s high tariff measures. Only 19 per cent of those surveyed said they were\u201cLooking forward\u201d to the prospect of negotiations with the US, while 72 per cent said they were\u201cNot looking forward\u201d.<\/p>\n
\u201cNow, some Japanese companies may have shifted from a one-way positive attitude towards US investment to a more cautious one.\u201d Wang believes that Japanese companies previously saw the US as an important overseas market and investment destination, to actively expand. But in recent years, after erratic White House policies and frequent attempts to block takeovers on\u201cNational security\u201d grounds, japanese companies investing in the US are likely to be more careful in assessing political risk, policy uncertainty and the long-term nature of investment returns. In particular, vigilance against Protectionism in the United States tendencies will increase.<\/p>\n
\u201cThe US government has in recent years raised the banner of ‘America First’ and adopted a series of trade protectionist measures, making Japanese companies, which are highly dependent on international trade, very uneasy. In the future, Japanese companies are likely to be more cautious when investing in the US and consider diversifying away from the single market.\u201d Wang also believes that some Japanese companies are still obsessed with investing in the US. \u201cAlthough there are strong voices against the US at home, the dependence of Japanese companies on the US market and their willingness to invest have not completely reversed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
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