By Kosaku Narioka

Nippon Steel shares rose sharply after the Japanese company received a conditional green light from President Trump to take control of U.S. Steel under what he described as a partnership.

Shares were recently 4.9% higher at 3,010 yen, equivalent to $21.13, on Monday in Tokyo.

Trump's announcement on Friday signaled that the Tokyo-based company could eventually enter the American steel market and make the big investments envisioned when it reached a $14.1 billion deal to take over U.S. Steel.

U.S. Steel, which generated nearly $16 billion in sales last year, primarily supplies sheet steel to the automotive, appliance and construction industries.

Nippon Steel is keen on adding the U.S. business to help offset declining sales in Japan.

Trump in March implemented 25% tariffs on imports of steel and aluminum to the U.S., reinstating global duties without exceptions for allies such as Japan.

Key aspects of the deal between Nippon Steel and U.S. Steel still need to be ironed out. Both companies were seeking more guidance from the administration about how much ownership Nippon could ultimately gain.

Major projects already pledged include equipment upgrades at plants in Gary, Ind., and near Pittsburgh. Nippon Steel has also committed to building a new steel mill at an undetermined location.

Trump had previously opposed the takeover proposed by the Japanese steelmaker, saying that U.S. Steel should remain domestically owned. The president signaled openness earlier this year to Nippon investing in but not owning U.S. Steel.

Over the past few months, Nippon Steel executives have met several times with Trump administration officials in Washington to outline their plans and spending commitments.

Write to Kosaku Narioka at kosaku.narioka@wsj.com

(END) Dow Jones Newswires

May 25, 2025 21:13 ET (01:13 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.