Trump might still have sway in U.S. Steel-Nippon deal

President-elect Donald Trump’s comments Tuesday, touting a United Arab Emirates company’s planned $20 billion investment in U.S. data centers, could spark hope for the proposed takeover of U.S. Steel by Japan’s Nippon Steel.

Though Trump previously said he was not in favor of a foreign company assuming ownership of the American steel titan, experts say he has a history of changing his mind on certain political issues.

“It wouldn’t be the first time that President Trump has reversed positions on a sensitive issue he’s declared strong views on in the other direction,” said Matthew Goodman, a distinguished fellow and director of the Greenberg Center for Geoeconomic Studies at the Council on Foreign Relations.

President Joe Biden last week blocked the sale, invoking the Defense Production Act, calling the sale a potential threat to national security.

“Strangely, I think the fact that Biden has blocked this deal could prompt Trump to say, ‘well, he did it — I’ll do the opposite,” said Goodman.

Signaling hope for a change of heart, U.S. Steel CEO David Burritt made an appeal to Trump during an interview Tuesday with NBC News, calling the president-elect a “smart guy” and asking him to help “make U.S. Steel great again.”

The Trump transition team declined to comment, referring TribLive to Trump’s limited past remarks on the issue.

Whether Trump could legally undo Biden’s move is another matter and likely would depend on the outcome of two lawsuits U.S. Steel and Nippon filed after the president’s decision.

One accuses the Biden administration of orchestrating a sham national security review by the Committee on Foreign Investment in the United States, teeing up Biden to block the deal and curry favor with labor allies.

The other claims United Steelworkers International President David McCall and rival manufacturer Cleveland-Cliffs CEO Lourenco Goncalves colluded to sink the deal for anti-competitive reasons, acts that amount to racketeering.

The companies have asked the courts to require another review from the national security panel, among other restitution.

The lawsuits are not the first of their kind.

Related:

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• Devastation, relief on spectrum of emotions for stakeholders in U.S. Steel sale after Biden's block
• U.S. Steel, Nippon say Biden's decision to block sale was 'political'
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• What they're saying about it: U.S. Steel-Nippon deal blocked

A Chinese company sued the committee for similar reasons in 2014. Though the company ultimately settled, what’s known as the “Ralls Ruling” established foreign companies’ right to due process during national security reviews, despite a clause of the Defense Production Act that protects presidential decisions from judicial review.

If this latest lawsuit, filed in the U.S. Court of Appeals for the District of Columbia, results in a similar ruling, the committee may have to repeat its review and hand over its findings to Trump, according to Stephen Heifetz, a partner at law firm Wilson Sonsini, who specializes in national security, though he finds that scenario unlikely.

“I would expect that a court would say, ‘gosh, is it really our role to be second-guessing the executive branch in these sorts of matters? And what does a redo exactly look like?’” Heifetz said.

The Trump administration also could get a say on the future of U.S. Steel if a different buyer emerges.

Cleveland-Cliffs made a $7.3 billion offer to U.S. Steel in 2023, and Goncalves said in a September statement his company remains “ready to acquire and invest in any and all union-represented assets that U.S. Steel shuts down,” including the aging Mon Valley Works.

Laura Hodges, a steel industry analyst with MEPS International, is unconvinced Cleveland-Cliffs has the resources to make a realistic offer akin to Nippon’s.

The Ohio-based manufacturer was the only one of the country’s four largest steel makers — including U.S. Steel — to post a loss in the third quarter of last year, she noted, and its reserves were further drained in November after purchasing Canadian flat-rolled steel producer Stelco for $2.8 billion.

Cleveland-Cliffs did not immediately return a request for comment.

If the company did scrape together the funds, a takeover of U.S. Steel likely would end up in an antitrust review by the Justice Department, said Hodges.