Key takeaways:

• Trump has ordered a fresh review of Nippon Steel's acquisition bid for U.S. Steel.
• The directive could potentially lead to a green light for the deal, previously blocked by Biden.
• U.S. Steel's shares surged over 13% following the announcement.
• Concerns about national security and the approval process by CFIUS remain central to the discussion.

President Donald Trump has initiated a new examination of Nippon Steel's proposed acquisition of U.S. Steel, seeking a recommendation from the Committee on Foreign Investment in the United States (CFIUS) on whether "further action" should be taken regarding the deal. In a memorandum, Trump directed CFIUS to conduct this review, thereby reigniting hopes for the merger that was previously halted by former President Joe Biden due to concerns over national security and potential implications for American infrastructure and supply chains. The White House's directive led to a significant increase in U.S. Steel's stock, which rose by more than 13% as investors interpreted this as a sign that the Trump administration may favor the merger. Nippon Steel expressed optimism regarding the review, stating their confidence that a thorough and objective assessment would reveal that their partnership will enhance American economic and national security.

Following Biden's blockage of the merger last January, both companies filed a lawsuit against CFIUS, arguing that Biden's decision was influenced by his electoral politics, specifically to curry favor with the United Steelworkers union in Pennsylvania, where U.S. Steel is headquartered. The lawsuit alleges infringement on their right to a fair review process. In light of these developments, the Trump administration is keen on concluding the merger discussions, having recently moved to extend deadlines regarding the lawsuit against CFIUS. Community leaders and union representatives have continued to express concern about the futures of steelmaking operations, with U.S. Steel indicating that without the deal, there may be operational shifts and relocations.

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