Former President Donald Trump has initiated a fresh review of Nippon Steel’s controversial proposal to acquire U.S. Steel for an estimated $15 billion. This move comes as shares of U.S. Steel saw a significant uptick, rising by 16% on Monday and continuing to climb nearly 3% in pre-market trading on Tuesday, indicating strong investor interest amid the ongoing political negotiations surrounding the deal.

In a directive issued late Monday, Trump called upon the Committee on Foreign Investment in the United States (CFIUS) to conduct a thorough national security review of the transaction. This review is intended to help ascertain whether any potential risks could necessitate further governmental intervention. It’s worth noting that the deal had previously been blocked by President Joe Biden just before he left office, and Trump had previously indicated his opposition to the acquisition during his campaign.

This new review process will grant both Nippon Steel and U.S. Steel an opportunity to respond to any concerns raised during the investigation, which is crucial given the broader implications of this deal on American steel production and jobs. CFIUS is tasked with completing its review within 45 days, after which it will present Trump with recommendations that will detail whether any measures proposed by the companies involved are adequate to mitigate identified risks.

The backdrop of this proposed merger is particularly significant as it intersects with the upcoming 2024 presidential election. The fate of U.S. Steel, based in Pittsburgh, Pennsylvania, is closely tied to the economic and labor concerns in that pivotal swing state. Biden had previously aligned himself with the United Steelworkers union, expressing fears that the merger could jeopardize existing labor agreements and lead to job losses, while also raising questions about financial transparency.

Nippon Steel's offer, made in 2023, stirred considerable political controversy and was seen as a litmus test for U.S. industrial policy. Late last year, CFIUS submitted a report to Biden highlighting national security concerns, but the panel was unable to reach a consensus about the potential implications of the merger. Ultimately, Biden decided to block the deal, reaffirming his commitment to protecting American manufacturing jobs.

In a strategic counter-move, Nippon Steel and U.S. Steel responded with a federal lawsuit aimed at overturning Biden's decision, alleging that the head of the Steelworkers union colluded with a rival steelmaker to sabotage their merger attempt. This legal action underscores the high stakes involved, both for the companies and for the broader American labor market.

Interestingly, in February, Trump remarked that Nippon Steel appeared to be shifting its strategy, suggesting instead that the Japanese firm might invest in U.S. Steel without pursuing the acquisition, reflecting the changing dynamics of international investment in American industries.