Japan’s largest steelmaker fought to take over its U.S. counterpart with heavy lobbying in D.C. and trips to Pennsylvania, including Pittsburgh Steelers games.
Nippon Steel’s announcement in December 2023 that it would take over U.S. Steel seemed doomed from the start: a deal, cut by a foreign company, involving workers in an iconic American manufacturing industry, in the swing state of Pennsylvania, in a presidential election year.
The Japanese steelmaker’s executives appeared to underestimate the political ramifications in those early days, a miscalculation they would spend the next 18 months rectifying through an unusually hands-on campaign to secure the deal, according to three people familiar with the company’s outreach who like others in this story spoke on the condition of anonymity to discuss private conversations. Nippon Steel declined to comment for this story.
In the months before President Joe Biden blocked the sale in January, citing national security concerns, the company’s executives held meetings in the Pittsburgh-memorabilia-filled garage office of Mayor Chris Kelly in West Mifflin, home to a U.S. Steel plant; held town halls; cheered on the Steelers; and won over local and state officials whose appeals, Nippon Steel said, to President Donald Trump were key to the eventual acquisition, finalized this month.
The whiplash ordeal revealed how investing in America could come with a significant risk even for a staunch U.S. security ally like Japan and that doing business in an increasingly protectionist and politicized environment could be fraught regardless of which party is in the White House, Japanese analysts said.
“Washington is now using national security as pretext for a lot of things, but, actually, many of those things are not [a threat],” said Taro Kono, a Japanese lawmaker and former foreign minister. “Nippon Steel could have invested years ago, and it took so long. … Politics intervened. And that is not a good sign.”
The December 2023 announcement of the takeover from Nippon Steel and U.S. Steel came as a surprise to key Japanese ministries, many Pennsylvania steelworkers and several U.S.-Japan experts who had been following the developments. Nippon Steel had minimal formal lobbying effort in the United States at the time, leaving it vulnerable to the immediate political backlash, the people familiar said.
Nippon Steel’s early hands-off approach reflected a longstanding Japanese corporate mindset that politics and business should be kept separate, analysts said, which proved impossible in this case. In November, Japan’s prime minister wrote a letter to Biden asking him to approve the deal, breaking with Tokyo’s stance at that point of not having the country’s leader merge politics with business.
“This isn’t just about economics anymore; it’s about strategic interest,” said a senior Japanese business official unrelated to the deal, speaking anonymously because that person was not authorized to speak publicly. “One of the most striking takeaways from this Nippon Steel-U.S. Steel deal was how directly government policies can influence business outcomes now.”
To many in the Japanese business community, it seemed like a no-brainer deal. Nippon Steel would bring fresh investment and cutting-edge technology, grow American steelmaking and create jobs, the company assured. Both steel companies had already agreed to the merger, after all. It was just a matter of getting Americans to see it that way.
Embedding in America
Nippon Steel quickly switched to an all-hands-on-deck offensive strategy, hiring Washington powerhouse lobbying firm Akin Gump — which it has paid more than $5 million since 2024, disclosures compiled by OpenSecrets show — to convince decision-makers on Capitol Hill, in the White House and on the National Security Council.
As the presidential campaign unfolded, the company also hired lobbying firm Ballard Partners, which has deep ties to Trump’s orbit, and brought on Mike Pompeo, Trump’s former secretary of state, as an adviser to help with its outreach in Washington.
Meanwhile, company executives, led by veteran negotiator Takahiro Mori, embedded in local communities in Pennsylvania. It was a personal approach to lobbying that few Japanese companies had employed until then, analysts said.
Through each appearance on local talk radio, trade publications and town halls, Mori’s message remained consistent: The deal would be good for America and would protect U.S. jobs.
Privately, Mori made the case to Pennsylvania leaders that there was not a better alternative for the state’s workers and the future of the American steel industry — and that Nippon Steel would make sure the deal is advantageous to the American side, one of the people familiar with Nippon Steel’s efforts said.
Company executives also took meetings regardless of party with leaders at all levels, such as union representatives, county commissioners and state lawmakers. Among those lawmakers was Pennsylvania state Sen. Kim Ward (R), who regularly met with Nippon Steel executives in 2024 through the finalization of the deal, her office said. Ward wrote letters to Biden and Gov. Josh Shapiro (D) encouraging them to accept the deal and, during the Trump administration, met with White House staffers and related government agencies to relay the importance of the project, the office said.
“Over the past 18 months, we made numerous trips, investing time and effort in dialogue with political, economic and community leaders,” Mori said in a news conference last week. “That helped them understand the true value of the deal, which I believe ultimately persuaded Trump.”
The grassroots campaign showed the importance of building relationships with stakeholders outside Washington, which the Japanese business community has been increasingly doing, said Jun Sawada, chairman of the Tokyo-based Japan-U.S. Business Council and chairman of Japanese telecommunications company NTT.
“Our strategy is going to change,” Sawada said. “… We have to respect the local side and delegate a lot of the decision to the local side.”
To boot, Nippon Steel had a particularly hard-charging chief executive, Eiji Hashimoto, who wouldn’t take no for an answer, even when the deal all but seemed to fall apart by the end of the Biden administration.
Hashimoto “really committed to a 100 percent acquisition,” said Yuichi Kori, government affairs expert at Edelman Japan. “… I’ve never seen a Japanese CEO continue with this strong mind until the completion of the deal. To me, that was amazing.”
Getting Trump to ‘yes’
Trump opposed the purchase during the presidential campaign, but his election presented a new opportunity for the Japanese company. In Biden’s final month in office, Nippon Steel sued the administration over its efforts to block the deal, but executives were able to approach the Trump administration with a clean slate.
In February, Japanese Prime Minister Shigeru Ishiba met with Trump in Washington. Japanese government officials had been facilitating meetings between Nippon Steel and administration officials, and they met with Nippon Steel as they prepared to brief Ishiba ahead of his visit, said a Japanese government official.
At a joint news conference after the two leaders’ meeting, Trump declared that Nippon Steel’s acquisition would be “an investment, rather than a purchase” — signaling an openness to working out an arrangement. The talking point echoed what Ishiba and Trump discussed, said two other Japanese officials.
“I think, frankly, that was inspired. And that opened the door to a larger conversation about how it would work,” said William Chou, deputy director of the Hudson Institute’s Japan Chair.
Ishiba’s involvement also reflected a broader acknowledgement among Japanese officials and businesses that there was a lot on the line in U.S.-Japan relations if the deal fell through, said Joshua Walker, president of Japan Society: “They understood that if this deal got killed, it would put a pretty serious cloud over all deals in the U.S.”
The moment was a turning point that showed Trump — who has called for foreign companies to invest in America and wanted to revive the U.S. manufacturing industry — would be negotiable, analysts said.
Nippon Steel sweetened the deal with $11 billion in investments by 2028 on top of the acquisition. And the company doubled down on terms that it had agreed to previously: a corporate board made up of a majority of U.S. citizens and an American chief executive.
Ultimately, the negotiations ended in an extraordinary move to grant the U.S. government a “golden share,” which would allow it to retain oversight and veto power on certain corporate functions, including transferring jobs outside the United States. Nippon Steel and the U.S. government also signed a national security agreement.
The deal has now prompted concerns over whether Japanese companies would need to forge a golden share-like agreement in future U.S. deals, Sawada said.
With the ongoing tariff negotiations with the U.S., Japanese companies are grappling with an increasingly protectionist America, Sawada said.
“We need to recognize that the world order has already changed from a globalism to … country-first and trade-issue [focused] models, back to 100 years [ago],” Sawada said.
Last month, Trump held a rally in West Mifflin to greenlight the agreement. Even until the rally, company executives weren’t sure where the U.S. president would land, Hashimoto said during a news conference in Tokyo last week.
“The employees, including union members, asked him to approve the deal and cheered his speech,” Hashimoto said. “That’s when I thought: We’re going to make it.”
On June 13, Trump signed an executive order enabling the acquisition. Nippon Steel and the U.S. government reached their agreement past midnight.
“When we walked out after midnight, that’s when I finally believed it was real,” Mori said.
Chie Tanaka contributed to this report.
