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Trump praises Nippon Steel for being a 'great partner" of U.S. Steel at a raucous rally

At a Friday political rally, U.S. president Donald Trump praised an "agreement", between Nippon Steel & U.S. Steel. He did not clarify if he intended to approve their diplomatically sensitive merger.

Trump announced that the American Steel Company would remain American on a Pittsburgh stage, Pennsylvania, decorated with signs praising "American steel." He also praised its new Japanese partner. It's unclear if he has given his approval to a merger that would give Nippon ownership as requested by the companies, or if he has formally approved the deal.

Trump said to more than 1,600 people wearing hard hats, "We are here today to celebrate an agreement that will ensure that this storied American Company remains an American company." You're going stay an American business, you know that right? We're going have a great partnership."

The Japanese company's proposed acquisition of U.S. Steel in 2023 divided Pennsylvania, a politically significant state, and its heavily-unionized blue-collar workers. It also brought tension to the otherwise friendly relationship between Tokyo and Washington.

The transaction's supporters hoped that Trump's trip would bring an end to a turbulent 18-month attempt by Nippon Steel, which was plagued by opposition from the union leadership and by two national security reviews.

Trump stated that the company will be "controlled" by the USA, that there would be no layoffs and that Nippon Steel would invest billions in modernizing U.S. mills to increase their production.

He announced a new plan that will be implemented by next week.

Tariffs are being raised

Import steel duty increased from 25% to 50%

Trump's comments on Friday did not shed any further light on whether or not he would give a formal approval to a deal.

Trump added, "I will be keeping an eye on it and it's going be fantastic."

Requests for comments on the current status of the deal negotiations have not been responded to by the White House or the companies.

Trump announced the rally last Friday and appeared to endorse this merger in a post on social media. This pushed the share price of U.S. Steel up by over 20%, as investors bet that he would give the merger the green light soon.

He sowed doubt on Sunday by describing to reporters the deal as not the takeover Nippon seeks but an investment, with "partial ownership" and control located in the United States.

U.S. Steel's headquarters is located in Pennsylvania. This symbolized the strength of the U.S. manufacturing industry at one time, but also the decline as steel factories and plants along the Rust Belt lost business to foreign competitors.

In presidential elections, the state that is most closely contested is often a prize.

Takahiro Muri, Nippon's Vice-Chair, said before Trump: "We wouldn't be here without President Trump. He has ensured the future of our company by approving this partnership."

Ryosei Acazawa, Japan's chief trade negotiator told reporters Friday that he couldn't comment yet on the deal.

"I'm aware of all the reports and posts made by President Trump in social media. There hasn't been any official announcement by the U.S. Government," Akazawa said, who was in Washington to negotiate tariffs.

Trump has to make a decision by Thursday, after the Committee on Foreign Investment in the U.S. completed its second review last week. The timeline may slip.

The road leading up to the rally on Friday has been bumpy.

Nippon Steel made an offer of $14.9 billion to U.S. Steel for December 2023. They wanted to take advantage of the expected increase in steel sales due to the bipartisan Infrastructure Law.

The tie-up was doomed from the beginning, as both Biden and Trump insisted that U.S. Steel be owned by Americans to win over Pennsylvania voters ahead of the presidential election in November.

Biden, after the review in December 2008, blocked the deal on grounds of national security. The companies filed suit, claiming they had not received a fair review, an accusation that the Biden White House denied.

Steel giants saw an opportunity with the Trump administration. The Trump administration opened a 45-day review of the proposed merger.

Trump's public remarks, which ranged from welcoming the Japanese company to "invest" in U.S. Steel to suggesting that Nippon Steel should have a minority stake, did not do much to boost investor confidence.

Last week, it was reported that Nippon Steel has proposed plans to invest up to $14 billion into U.S. Steel operations. This includes $4 billion for a new mill. If the Trump administration approves its merger bid. Reporting by Jeff Mason and Alexandra Alper, Writing by Trevor Hunnicutt, Additional reporting by Makiko Yazaki in Tokyo, and Nathan Layne, in New York, and Editing by Chizu Nomiyama Alistair Bell, and Chris Reese

(source: Reuters)