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Kyodo News
4 hours ago
- Business
- Kyodo News
FOCUS: Nippon Steel buyout spat hints at business fragility in U.S.
By Junko Horiuchi, KYODO NEWS - 7 hours ago - 13:07 | Japan, All U.S. President Donald Trump's bid to attract investment threatens to undermine the appetite for corporate spending in an ironic twist, with the 18-month saga over Nippon Steel Corp.'s buyout of United States Steel Corp. showing the growing vulnerability of businesses in the U.S. market, according to analysts. The U.S. administration's earlier blocking of the $14.1 billion takeover deal was clearly driven by political motives and corporate executives will no longer be able to make decisions regarding their U.S. operations based only business criteria, they said. The wrangling in the high-profile case could lead global companies to think twice about making sizeable investments and acquisitions in the world's largest economy, with many moving to reduce their exposure to the U.S. market. "I do think many companies are pausing investments and major capital expenditures, not only because of the Nippon-U.S. Steel deal but due to general uncertainty surrounding political and economic dynamics in Washington," said Zack Cooper, senior fellow at the American Enterprise Institute. Trump had repeatedly rejected Nippon Steel's plan to take full control of U.S. Steel. But Nippon Steel, the world's fourth-largest steel producer, and U.S. Steel, the 29th largest, said Wednesday following Trump's approval of the buyout plan that they had signed a national security agreement with the U.S. government and finalized the acquisition transaction. Under the deal, the Japanese steelmaker is obliged to invest $11 billion by 2028 on bolstering the U.S. steelmaker's operations, far more than the previously planned $2.7 billion. The U.S. government also obtained a golden share allowing it to veto key management decisions, such as when reducing investment, shedding production capacity in the United States or closing plants. Nippon Steel CEO Eiji Hashimoto told a press conference on Thursday that his company had learned from a year and a half of negotiations with the U.S. government that a flexible management strategy is required. The top executive said it had been believed that governments should not get involved in business deals. "But are strengthening their involvement in economic and business matters through industrial policy," he said. Trump's predecessor, Joe Biden, initially blocked the purchase of U.S. Steel on national security grounds, saying the manufacturing icon, based in Pittsburgh, Pennsylvania -- a key battleground state in the 2024 presidential election -- should be "American-owned and American-operated." Trump also opposed the deal during the presidential race, saying the acquisition of a minority stake in U.S. Steel would not cause any issues, but foreign ownership of the company would not be good psychologically. He ordered a new review of the deal by the Committee on Foreign Investment in the United States in April with a deadline for Trump to make a final decision initially set for June 5. "Because predictability is insanely low right now in the United States, Japanese companies are going to cut back the percentage of their business in the country," said Keisuke Hanyuda, the chief executive of Owls Consulting Group. While rising costs must be dealt with, "The last thing a business wants is to lose predictability," said Hanyuda, a former Japanese trade ministry official in charge of trade talks. Nippon Steel is betting on firm demand for high-tensile strength steel in the U.S. market, capitalizing on its advanced production technology for high-end steel plates used in products such as electric vehicles. The United States is one of three growth markets for the Japanese steelmaker, compensating for shrinking domestic demand. Under Trump, the steel, aluminum, auto and semiconductor sectors have been targeted by specific tariffs driven by political pressures and companies in these industries should consider other markets for growth to hedge their risks, analysts say. Earlier this month, Trump signed an order doubling the tariffs on steel and aluminum imports to 50 percent. "I think Japanese companies will have a difficult time purchasing famous American companies in sectors that President Trump prioritizes, such as autos, steel, aluminum, and chipmaking," Cooper at the American Enterprise Institute said, though investment in other sectors may still be viable. "But any Japanese company that is considering a major deal in the United States should develop a detailed political strategy before announcing a deal, lest they suffer similar roadblocks as Nippon Steel," he said. The United States remains a lucrative market with high growth potential but some global companies are beginning to reduce their reliance on it after the tariffs imposed by Trump, Hanyuda said. The European Union and the Association of Southeast Asian Nations, for example, have resumed economic partnership negotiations, while the EU is also looking at Japan, which is part of a trans-Pacific free trade pact that took effect in 2018 without the United States. Related coverage: U.S. Steel's strategic importance growing: Nippon Steel CEO Nippon Steel finalizes deal to make U.S. Steel wholly owned Trump effectively approves Nippon Steel's takeover of U.S. Steel
Kyodo News
12 hours ago
- Business
- Kyodo News
FOCUS: Nippon Steel buyout spat hints at business fragility in U.S.
By Junko Horiuchi, KYODO NEWS - 7 minutes ago - 13:07 | Japan, All U.S. President Donald Trump's bid to attract investment threatens to undermine the appetite for corporate spending in an ironic twist, with the 18-month saga over Nippon Steel Corp.'s buyout of United States Steel Corp. showing the growing vulnerability of businesses in the U.S. market, according to analysts. The U.S. administration's earlier blocking of the $14.1 billion takeover deal was clearly driven by political motives and corporate executives will no longer be able to make decisions regarding their U.S. operations based only business criteria, they said. The wrangling in the high-profile case could lead global companies to think twice about making sizeable investments and acquisitions in the world's largest economy, with many moving to reduce their exposure to the U.S. market. "I do think many companies are pausing investments and major capital expenditures, not only because of the Nippon-U.S. Steel deal but due to general uncertainty surrounding political and economic dynamics in Washington," said Zack Cooper, senior fellow at the American Enterprise Institute. Trump had repeatedly rejected Nippon Steel's plan to take full control of U.S. Steel. But Nippon Steel, the world's fourth-largest steel producer, and U.S. Steel, the 29th largest, said Wednesday following Trump's approval of the buyout plan that they had signed a national security agreement with the U.S. government and finalized the acquisition transaction. Under the deal, the Japanese steelmaker is obliged to invest $11 billion by 2028 on bolstering the U.S. steelmaker's operations, far more than the previously planned $2.7 billion. The U.S. government also obtained a golden share allowing it to veto key management decisions, such as when reducing investment, shedding production capacity in the United States or closing plants. Nippon Steel CEO Eiji Hashimoto told a press conference on Thursday that his company had learned from a year and a half of negotiations with the U.S. government that a flexible management strategy is required. The top executive said it had been believed that governments should not get involved in business deals. "But are strengthening their involvement in economic and business matters through industrial policy," he said. Trump's predecessor, Joe Biden, initially blocked the purchase of U.S. Steel on national security grounds, saying the manufacturing icon, based in Pittsburgh, Pennsylvania -- a key battleground state in the 2024 presidential election -- should be "American-owned and American-operated." Trump also opposed the deal during the presidential race, saying the acquisition of a minority stake in U.S. Steel would not cause any issues, but foreign ownership of the company would not be good psychologically. He ordered a new review of the deal by the Committee on Foreign Investment in the United States in April with a deadline for Trump to make a final decision initially set for June 5. "Because predictability is insanely low right now in the United States, Japanese companies are going to cut back the percentage of their business in the country," said Keisuke Hanyuda, the chief executive of Owls Consulting Group. While rising costs must be dealt with, "The last thing a business wants is to lose predictability," said Hanyuda, a former Japanese trade ministry official in charge of trade talks. Nippon Steel is betting on firm demand for high-tensile strength steel in the U.S. market, capitalizing on its advanced production technology for high-end steel plates used in products such as electric vehicles. The United States is one of three growth markets for the Japanese steelmaker, compensating for shrinking domestic demand. Under Trump, the steel, aluminum, auto and semiconductor sectors have been targeted by specific tariffs driven by political pressures and companies in these industries should consider other markets for growth to hedge their risks, analysts say. Earlier this month, Trump signed an order doubling the tariffs on steel and aluminum imports to 50 percent. "I think Japanese companies will have a difficult time purchasing famous American companies in sectors that President Trump prioritizes, such as autos, steel, aluminum, and chipmaking," Cooper at the American Enterprise Institute said, though investment in other sectors may still be viable. "But any Japanese company that is considering a major deal in the United States should develop a detailed political strategy before announcing a deal, lest they suffer similar roadblocks as Nippon Steel," he said. The United States remains a lucrative market with high growth potential but some global companies are beginning to reduce their reliance on it after the tariffs imposed by Trump, Hanyuda said. The European Union and the Association of Southeast Asian Nations, for example, have resumed economic partnership negotiations, while the EU is also looking at Japan, which is part of a trans-Pacific free trade pact that took effect in 2018 without the United States. Related coverage: U.S. Steel's strategic importance growing: Nippon Steel CEO Nippon Steel finalizes deal to make U.S. Steel wholly owned Trump effectively approves Nippon Steel's takeover of U.S. Steel
Time of India
a day ago
- Business
- Time of India
Is the Nippon Steel and US Steel merger a threat to American workers?
Nippon Steel 's 2023 announcement that it would buy US Steel , the linchpin of American steelmaking, sparked political and union opposition in the United States before being finally sealed Wednesday under strict conditions. This is how the saga developed: August 2023 The struggling US Steel launches a strategic review after receiving several unsolicited partial or total buyout offers. It rejects an offer from its American competitor, Cleveland-Cliffs (CLF), despite potential support from the steelworkers' union USW. December 2023 Nippon Steel announces an agreement to buy US Steel for $14.1 billion, plus $800,000 in debt -- unanimously approved by both boards of directors -- with finalisation expected by the third quarter of 2024. But the USW fiercely opposes the deal, saying it will not support anyone other than CLF. Days later, US President Joe Biden calls for "serious scrutiny" in terms of supply chain reliability. The United States is the world's leading steel-importing country. The US government agency responsible for assessing foreign investment risks, CFIUS, scrutinises the project. March 2024 Biden, campaigning for a second term, opposes the buyout in defence of American "workers", saying it is vital for US Steel "to remain an American steel company that is domestically owned and operated". US Steel, however, asserts that the deal can "combat the competitive threat from China", the sector's global leader. April 2024 US Steel shareholders overwhelmingly approve the buyout at an extraordinary general meeting. July 2024 Japanese media outlets reveal that Nippon Steel has hired Mike Pompeo, former US Secretary of State under Donald Trump, to advocate for its cause. September 2024 Kamala Harris, now the Democratic presidential candidate, states that US Steel should "remain American-owned and American-operated". Nippon Steel asserts that it will remain "a US company" with a majority of the board being American citizens. Trump, the Republican candidate, pledges to oppose the buyout proposal. US Steel threatens to shutter facilities in Pennsylvania -- perhaps the most critical swing state in the election between Harris and Trump -- if the sale is blocked. December 2024 Trump, now President-elect, confirms he will "block this deal from happening". He vows on social media to "make U.S. Steel Strong and Great Again" through tax incentives and tariff hikes. Nippon Steel condemns the opposition as "inappropriate" influence of politics. In mid-December, CFIUS fails to reach a decision owing to a lack of consensus within its ranks. January 2025 Biden blocks the acquisition on national security grounds. The issue escalates into a diplomatic dispute: Japanese Economy Minister Yoji Muto deems the decision "incomprehensible and regrettable". US Steel and Nippon Steel threaten legal action over "illegal interference" before eventually obtaining a Washington-granted extension until June to formally abandon their project. They express continued commitment to seeing it through. February 2025 Trump suggests an alternative to a merger: an investment from Nippon Steel. April 2025 Trump orders a new review of the project by CFIUS to determine whether "further action in this matter may be appropriate", reopening the door to the buyout. The review will involve "identifying potential national security risks associated with the proposed transaction and providing adequate opportunity to the parties to respond to such concerns". May 2025 Following the release of a new CFIUS advisory, Trump approves a partnership between the steelmakers through an unspecified agreement allowing US Steel to "REMAIN in America". Nippon Steel says it "applauds" the bold action taken by Trump but USW warns of a "disaster for American steelworkers". June 15, 2025 Trump removes the final regulatory hurdle by signing an executive order designed to eliminate all national security risks following the buyout. The US government will hold a perpetual non-economic "golden share" allowing it veto power over significant decisions affecting American jobs. Beyond the previously agreed acquisition price of $14.1 billion excluding debt, an additional $14 billion in investments by Nippon Steel will be required, $11 billion of which must be completed by 2028. June 18, 2025 Nippon Steel and US Steel announce their merger agreement, with the American group subsequently requesting the New York Stock Exchange to delist its stock.
New York Post
02-06-2025
- Business
- New York Post
Trump's art of the steel deal, Don's sensible national-park cuts and other commentary
From the right: Trump's Art of the Steel Deal 'Nippon Steel is buying US Steel for $15 billion and has agreed to let the American company remain American-operated' in a Trump-approved deal that 'addressed concerns about national security while securing economic gains for the nation,' cheers the Washington Examiner's editorial board. 'Local unions have overwhelmingly backed the deal,' which lets Nippon Steel become 'the world's second-largest steel producer, allowing it to compete with China's Baowu Steel Group, and gaining access to the American market, one of the world's largest.' Gov. Josh Shapiro (D-Pa.) called the bargain a ' 'BFD' that he supports enthusiastically.' Advertisement Wow: 'How often do the terms of a corporate merger unite Republicans, Democrats, and union leaders, while creating tens of thousands of jobs and reducing the market dominance of the nation's greatest geopolitical foe?' Libertarian: Don's Sensible National-Park Cuts 'Why should the National Park Service be funding so many sites,' including some that aren't national parks? 'And what would happen if some of those properties were transferred to state or tribal management?' asks Reason's Liz Wolfe. 'The Trump administration is asking those sensible questions, and is proposing to cut $1.2 billion from the agency's budget' by turning over some niche sites to local management. Advertisement 'It's always been unclear to me why we expect taxpayers across the country to pay for the upkeep and management of' sites 'they will never visit and have never heard of.' Some may end up closing without federal funding, 'but if there's no political will within the state to fund these sites, maybe that's a sign . . . that they shouldn't continue to be publicly operated.' Get opinions and commentary from our columnists Subscribe to our daily Post Opinion newsletter! Thanks for signing up! Enter your email address Please provide a valid email address. By clicking above you agree to the Terms of Use and Privacy Policy. Never miss a story. Check out more newsletters Labor beat: Cali's $30 Minimum-Wage Oops Los Angeles is 'on track' to miss out on hosting the 2028 Summer Olympics, thanks to 'a new $30 minimum wage for hotel and airport workers passed at the behest of the city's hospitality unions,' laments Michael Saltsman at The Wall Street Journal. Advertisement LA's Olympic bid promised 'enough hotel rooms for athletes, spectators and officials' at given rates, but eight hotels have now pulled out, 'citing the unworkable economics,' and a development that would create 395 rooms was canned. All of which means less tax revenue for Los Angeles. Meanwhile, California wants $40 billion from Uncle Sam to help LA recover from the wildfires. Congress should condition aid 'on a moratorium on any mandates, including the $30 minimum wage, that would put recovery and taxpayer dollars at risk.' From the left: Ignoring the Media's 'Original Sin' The Jake Tapper-Alex Thompson book 'Original Sin' details how President Biden's team 'concealed his cognitive and physical decline,' but 'shifts blame to Democrats, ignoring how the media aided the cover-up,' grumbles Nolan Higdon at The Hill. Advertisement 'Credibility in journalism — hard to earn, easy to lose — once demanded rigorous objectivity.' No doubt, the media's 'abandonment of objectivity accelerated with Donald Trump's rise.' Despite Tapper's own efforts to portray 'himself as deceived' and 'positioning his book as a reckoning,' it 'evades the real question: did this cover-up begin before the election?' 'The answer is yes — and Tapper was part of it.' The public won't buy journalists' supposed return to 'objectivity' because the media's lost credibility 'isn't easily reclaimed.' Conservative: RIP, Monetary Hero Stanley Fischer Commentary's Seth Mandel celebrates the 'great warrior of monetary policy,' Stanley Fischer, dead at 81, who 'saved Israel's economy twice.' First his advice helped end the Jewish State's mid-1980s inflationary spiral with a bipartisan plan that 'cut government, negotiated limits with the uber-powerful Histadrut labor union, and reined in Israel's money-printing habits.' And, as 'the governor of the Bank of Israel' when 'the global financial crisis hit,' he deftly manipulated the value of the shekel 'to stabilize investment' without putting 'stress on Israel's exports.' He was so impressive 'that several Arab states backed him in an unsuccessful bid to lead the IMF in 2011,' though 'he was an Israeli citizen and Israel's top financial figure at the time.' — Compiled by The Post Editorial Board
Saudi Gazette
01-06-2025
- Health
- Saudi Gazette
At least 30 killed as Israeli forces open fire on Gaza civilians waiting for aid
GAZA — At least 30 Palestinians were killed and over 150 others wounded on Sunday when Israeli forces opened fire on civilians gathered to receive humanitarian aid in Al-Mawasi, west of Rafah in southern Gaza, Anadolu Agency reported. Eyewitnesses said large crowds assembled early Sunday morning at an aid distribution point operated by the U.S.-backed 'Gaza Humanitarian Foundation.' As civilians moved toward the center, Israeli military vehicles allegedly opened fire while drones dropped explosives, resulting in mass casualties. Medical personnel confirmed that the bodies of at least 30 victims, along with dozens of wounded, were taken to the Nasser Medical Complex in Khan Younis and to the International Committee of the Red Cross field hospital nearby. In a preliminary statement, the Gaza Health Ministry said 179 people had been brought to local hospitals following the assault. The toll included 21 confirmed dead, five in a state of clinical death, and 30 in critical condition. The ministry described the situation as dire, with ambulances struggling to reach victims due to continued gunfire. Some casualties were evacuated using carts. In a parallel incident, Israeli forces reportedly fired on civilians near another American-operated aid center close to the Netzarim corridor in central Gaza. At Al-Bureij camp, one person was killed and 20 injured after gunfire targeted a gathering at the entrance to the camp, according to medical sources at Al-Awda Hospital in Nuseirat. The Government Media Office in Gaza condemned the attacks, accusing Israel of weaponizing humanitarian aid to 'blackmail starving civilians and forcibly gather them in exposed killing zones.' Sunday's incidents bring the number of Palestinians killed near aid distribution points to at least 39 over the past week, with more than 220 injured, according to a tally by Anadolu based on Palestinian sources. The American aid initiative under the name 'Gaza Humanitarian Foundation,' which launched operations about a week ago, has drawn sharp criticism from Palestinian communities and humanitarian organizations. Many have questioned its legitimacy and accused it of bypassing UN frameworks and established international humanitarian protocols. Since March 2, Israel has closed all Gaza border crossings, cutting off the flow of food, medicine, and fuel to the enclave's 2.4 million residents. The blockade comes amid Israel's ongoing offensive in Gaza, which began in October 2023 and has resulted in nearly 54,400 Palestinian deaths—most of them women and children. International concern over the crisis has intensified. In November, the International Criminal Court issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant over alleged war crimes and crimes against humanity. Israel also faces a genocide case at the International Court of Justice. — Agencies
