Al Root

The battle for United States Steel continues to be, well, really, really, weird.

Activist investor Ancora wrote another letter to U.S. Steel shareholders, pushing its plan for new leadership. Ancora wants a new CEO, former Stelco chief Alan Kestenbaum, to run a turnaround effort. What's more, they cited President Donald Trump's tariffs as a tailwind for the industry. Ancora posts updates at its www.MakeUSSteelGreatAgain.com.

U.S. Steel didn't immediately respond to a request for comment about the new letter.

Shares of the embattled steel maker were up 2.8% in early trading at $37.96, while the S&P 500 and Dow Jones Industrial Average were up 0.4% and 0.2%, respectively.

The letter wasn't the reason. The tariffs are helping steel stocks. On Sunday, President Trump said he would impose 25% tariffs on incoming steel and aluminum. Other steel stocks were rallying, too. Cleveland-Cliffs stock was up about 13.4% in early trading. Nucor shares added 7.4%.

U.S. Steel stock is lagging partly because of the endless deal-related whipsawing. Investors just aren't sure what's likely to happen.

In August 2023, Cleveland-Cliffs tried to buy U.S. Steel. That kicked off a bidding war eventually won by Nippon Steel for $55 per share in cash. That deal faced stiff political opposition, and then-President Joe Biden blocked it in January 2025. U.S. Steel and Nippon are suing to overturn that decision. On Friday, President Trump said at a press conference with Japanese Prime Minister Shigeru Ishiba that Nippon would invest in U.S. Steel, not buy it.

U.S. Steel didn't return a request for comment about the investment. Nippon declined to comment.

U.S. Steel stock was above $40 on Friday after reports that President Trump was likely to let the merger happen.

"The flip-flop that U.S. Steel investors were hoping to get from President Trump last week turned out to be more flop than flip," wrote Gordon Haskett analyst Don Bilson in a Monday report. He believed Trump might actually reverse Biden's decision. "We've been in the camp that believed Trump wouldn't squander an opportunity to reverse another Joe Biden decision and, in the process, knife a union boss."

Instead, Trump opted for tariffs and investment.

"Ironically, Ancora, as a U.S. Steel shareholder, would have benefited from the flip-flop that didn't happen," pointed out Bilson.

It's been tough to figure out what exactly is anyone's endgame in the U.S. Steel drama.

Cleveland-Cliffs wanted to consolidate the U.S. Steel industry, betting more market share would mean more-stable profits. Nippon, for its part, wanted to establish a larger U.S. presence, but it was paying dearly to do so. President Biden aligned his policies with union leadership. President Trump believes in tariffs and domestic investment.

Whatever happens, the losers are U.S. Steel shareholders. Receiving $55 in cash from Nippon looks unlikely, to say the least.

Write to Al Root at allen.root@dowjones.com

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February 10, 2025 10:42 ET (15:42 GMT)

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