Nippon Steel’s purchase of U.S. Steel to get new national security review

U.S. President Donald Trump ordered a second national security review for Nippon Steel’s purchase of U.S. Steel — a rare move that could get the derailed merger back on track.

In a memo to Treasury Secretary Scott Bessent on Monday, Trump directed the Committee on Foreign Investment in the United States (CFIUS) to review the transaction and assist him in determining whether any “further action” is warranted.

The acquisition was previously reviewed by CFIUS, which did not reach a consensus as to whether the transaction would threaten national security. Former U.S. President Joe Biden then blocked the deal in early January, and Nippon Steel became the first Japanese company to be stopped from buying U.S. assets by a president after a CFIUS review.

During his second presidential campaign, Trump said he would block the deal once he assumed office.

The president's instructions on the second review came just hours after a call between Trump and Prime Minister Shigeru Ishiba over the tariffs rolled out by the president last week. On Tuesday, Chief Cabinet Secretary Yoshimasa Hayashi declined to confirm whether Ishiba touched on the Nippon Steel-U.S. Steel transaction during the call on Monday night.

“The government intends to make efforts as necessary to facilitate communication among the relevant parties,” Hayashi said, while declining to comment further on the order itself.

CFIUS now has 45 days to submit a recommendation to the president regarding its findings on whether the proposed transaction poses a national security risk. The president will then decide whether or not to greenlight the acquisition based on the committee’s recommendation.

The review will be conducted from the beginning again and be confidential. It will examine whether measures proposed by the companies are sufficient to mitigate national security risks identified by the committee, according to the president's memo.

In trading in the U.S. on Monday, the day the memo was released, U.S. Steel shares rose 16.22%. Nippon Steel rose about 11% in Tokyo trading on Tuesday morning and finished the day up 6%.

In a statement issued early Tuesday morning from Tokyo, Nippon Steel said it is pleased with Trump’s decision and looks forward to a timely resolution so it can resume its planned investments.

“We have been confident from the outset that an objective, fact-based review of our proposed partnership with U.S. Steel will show that it strengthens American economic and national security,” Nippon Steel said in the statement.

U.S. Steel commended Trump’s decision in a similar statement.

“Today’s decision by president Trump is pivotal as we work to deliver on new and historic levels of investment in American steelmaking,” the company said, adding that it anticipates working with the Trump administration as it finalizes the deal.

In January, Nippon Steel and U.S. Steel filed a lawsuit challenging Biden’s decision to block the deal. A court hearing is scheduled for May.

Washington and Tokyo previously signaled that Nippon Steel will withdraw its proposal to fully acquire U.S. Steel and opt for an “investment” instead. The two companies insist they have not given up on their plan to merge.

Nippon Steel Vice Chairman and Executive Vice President Takahiro Mori reportedly traveled to Washington to meet with Commerce Secretary Howard Lutnick last week, and proposed more investment in U.S. Steel’s blast furnaces to speed up closing of the stalled transaction.