Japanese steel powerhouse Nippon Steel has announced plans to invest as much as $14 billion into U.S. Steel’s operations, including a potential $4 billion commitment to construct a new steel mill in the United States.
This sizeable investment is conditional upon receiving approval from the Trump administration for its proposed acquisition of the historic American steel manufacturer, according to confidential sources and internal documents obtained by Reuters.
The investment proposal outlines a strategy to channel $11 billion into modernising and expanding U.S. Steel’s infrastructure through to 2028. A notable element of the plan is an initial $1 billion allocated to develop a greenfield site, which is expected to increase by an additional $3 billion over subsequent years—a detail not previously disclosed publicly. This capital injection aims to boost U.S. Steel’s production capabilities and strengthen domestic steel manufacturing capacity.
Following the announcement of this investment pledge, shares of U.S. Steel rose by more than 3%, showing investor optimism about the potential deal.
However, the merger has faced considerable political and regulatory obstacles. Both President Donald Trump and former President Joe Biden have voiced concerns, emphasising the importance of keeping U.S. Steel under American ownership. The company’s headquarters in Pennsylvania, a politically crucial swing state, has made the deal especially sensitive in domestic political circles.
In January 2025, the Biden administration blocked the merger on national security grounds, citing worries over foreign control of critical infrastructure. This decision prompted legal challenges from both companies, which alleged bias in the national security review process—a claim the White House has firmly rejected.
In response, the Trump administration, which assumed office in January 2025, reopened the national security review with a fresh 45-day evaluation period. The companies face a key deadline of May 21, 2025 to complete this review, after which President Trump has 15 days to make a final ruling, although this timeline may be extended.
Nippon Steel’s latest offer shows a substantial increase from its original $1.4 billion investment pledge, reflecting a determined effort to secure government approval. Two sources close to the matter indicated that the Trump administration specifically requested a larger investment commitment to ensure the deal aligns with U.S. economic and security interests.
Furthermore, the agreement includes a hefty $565 million breakup fee, highlighting the high stakes for Nippon Steel should the merger fail. Furthermore, U.S. steel tariffs currently stand at 25%, complicating foreign companies’ access to the American market and increasing pressure on Nippon Steel to demonstrate a firm commitment to domestic production.
Nippon Steel’s bid coincides with a push to revitalise American manufacturing, particularly in the steel sector, which is considered vital for national infrastructure and defence. The bipartisan infrastructure legislation passed in recent years is expected to drive increased demand for steel products, enhancing the value of the acquisition.
Recently, Nippon Steel Vice Chairman Takahiro Mori travelled to Washington D.C. to meet with U.S. officials and advocate for the merger’s approval. The outcome of the national security review will be closely monitored by industry experts, investors, and policymakers, as it may set a precedent for foreign investment in critical U.S. industries.