Description: US President Donald Trump signed an executive order approving Japanese Nippon Steel investment in US Steel. The companies later announced they eliminated all the conditions that previously represented a national security obstacle for the deal to be finalized and stated they went forward with the $14.9 billion investment. Nippon Steel would complete the initial investment of $11 billion by 2028, on top of making improvements by investing additional $3 billion in a renewed steel mill, while the US government would have the so – called golden share, which enables the US to remain in control over the company’s executive decisions in the future. Even though the effective acquisition of US Steel by Nippon was labeled as an agreement and an investment, union representatives voiced concerns that the US government would be privately involved in determining salaries and investments conditions in the newly formed business entity which undermined the private company’s integrity on the market. The executive order approving the transaction came the same day when Japanese Prime Minister Shigeru Ishiba and US President Donald Trump held a phone call, discussing the ongoing trade negotiations between the two countries.
Impact: The contested transaction undertaking two of the largest steel companies in Japan and the US has come to a close in an integral time of the US – Japan trade negotiations and strained bilateral ties. Nippon Steel’s bid was previously blocked by both Trump and Joe Biden who cited national security concerns and the possibility of Nippon Steel undermining one of the most crucial US industries. The fact that the executive order comes after Ishiba and Trump held a phone call indicates that trade negotiations are progressing rapidly and both countries are closing in on a potential comprehensive agreement which would protect their national economic interests. The agreement certainly improves Japan’s position in the negotiations as the country is effectively stating they are willing to unequivocally invest in the US economy. The US continues to transactionally negotiate trade while not taking into account geostrategic implications which in the long – term could potentially inflict damage on US foreign interests.