Description: Japanese steel giant Nippon Steel would most likely conclude the merger with US Steel in the upcoming months. US President Donald Trump and Pennsylvanian Senator David McCormick announced that a proposal has been delivered to Nippon Steel regarding the conditions under which the US would agree to allow Nippon Steel to invest in US Steel. The proposal included Nippon allowing US Steel to have an American CEO and American board of directors which would allow the company’s decision to be mostly in line with US economic interests. Nippon Steel hasn’t announced any comments regarding the proposals from the US however, most of the discussed and proposed terms were initially floated by Nippon Steel. Nippon Steel’s bid was previously blocked by both US presidents Trump and Biden citing national security concerns as US Steel was the largest steel producing company in the country. The merger between the companies would create the third -largest global steel producing company in a market which is mostly dominated by Chinese companies.
Impact: The potential conclusion of the US – Nippon Steel agreement between the US and Japan marks a significant development in the bilateral relations between the two countries. Previously banned by both US administrations which cited national security concerns, the transaction contributed towards widening the gap in bilateral relations between the US and Japan. Trump’s tariffs further catalyzed the deteriorating bilateral relations as Japan was one of the first countries to approach the US and engage in trade negotiations. The merger would impact the ongoing trade talks as well as strengthen bilateral relations as both US and Nippon Steel would emerge as the main challenger of an adversarial country such as China, which has long lasting dominance in the steel industry.