The Trump administration has ordered a new national security review of Nippon Steel Corp’s bid to buy U.S. Steel, signaling a potential new avenue for the $14.9 billion deal to go through.

President Joe Biden blocked the acquisition in January, after a review by the Committee on Foreign Investment in the United States (CFIUS) deadlocked over potential national security risks and did not issue a recommendation.

President Donald Trump gave CFIUS 45 days to submit a recommendation “describing whether any measures proposed by the parties are sufficient to mitigate any national security risks identified by CFIUS.

“This recommendation shall include a statement describing each member agency’s position, including the reasons for such position,” the memorandum issued on Monday directed.

Pittsburgh-based U.S. Steel and Nippon Steel, the largest steelmaker in Japan, had filed lawsuits challenging the presidential block, alleging it was politically motivated and aided by rival steelmaker Cleveland-Cliffs and the United Steelworkers union. The labor union had pledged its exclusive approval for Cliffs’ effort to buy U.S. Steel.

The executive order issued on Monday coincides with a deadline for the U.S. government to file a response in the lawsuit pending in the U.S. Court of Appeals for the D.C. Circuit challenging the CFIUS review.

Last month, a judge granted a request by the U.S. Justice Department to push back its required response date until April 7, which U.S. Steel and Nippon did not oppose.

The federal government asked for the delay to “allow the government to complete its ongoing discussions with the parties regarding the U.S. Steel and Nippon Steel transaction with the goal of eliminating the need for this Court’s resolution of the litigation on the merits.”

U.S. Steel thanked the president in a statement on Monday, saying “his action today validates our Board’s bold decision to challenge President Biden’s unlawful order.

“Today’s decision by President Trump is pivotal as we work to deliver on new and historic levels of investment in American steelmaking. We look forward to continuing to work closely with President Trump and his Administration to finalize this significant and important investment, which will preserve existing jobs, create new jobs, enhance national security and secure a bright future for American manufacturing.”

The CFIUS group that will be conducting the new review is comprised of all new members from the Trump administration.

As reported by Bloomberg News, U.S. Commerce Secretary Howard Lutnick, who is now a member of CFIUS, met with Nippon Steel’s Vice Chairman Takahiro Mori in recent days. The Japanese company reportedly offered to increase its investment into U.S. Steel’s facilities to $7 billion, from the $2.7 billion it had pledged previously.

Mr. Lutnick also was said to have met with Ancora Holdings, an activist investor with a 1% stake in U.S. Steel that has launched a proxy challenge aiming to oust U.S. Steel’s CEO David Burritt and place nine members on the company’s board of directors.

In a reversal of its previous posture, Ancora said on Monday that it is “committed” to seeing the U.S. Steel/Nippon deal close.

Less than a month ago, Ancora said in a letter to shareholders that “the sale has no chance of being resurrected” and demanded an immediate termination of the merger agreement.

“Today, however, the Company’s securities filings and other public reports about increased capital investments indicate that the prospects for the transaction have significantly improved,” Ancora wrote in a letter to U.S. Steel’s shareholders Monday.

Ancora’s letter last month followed Trump’s announcement, during a news conference with Japanese Prime Minister Shigeru Ishiba, that Nippon would invest in U.S. Steel without buying it.

“I didn’t want it purchased,” Trump said, according to a transcript. “But investment, I love. And they're going to do a big investment subject to getting the deal done.”

Mr. Ishiba tried to stress that the investment would be “mutually beneficial.”

“Japanese technology will be provided and the better-quality products will be manufactured in the United States,” he said.

Nippon has a long history of joint ventures, which it calls alliances, with other companies both inside Japan and abroad.

For example, it owns a steel mill in Calvert, Ala., through a 50/50 joint venture with European steelmaker ArcelorMittal. Nippon has said it would sell its stake in the facility if it’s identified as a problem by CFIUS.

In Mexico, Nippon holds a 49% stake in a manufacturing venture that makes steel for the automotive market.

It’s hard to imagine what an investment, not a takeover would look like if not for a joint venture, said Phil Gibbs, managing director at KeyBanc Capital Markets Inc. And if Trump sticks to what he has been saying for over a year stands — that he wants American ownership of U.S. Steel — a minority equity stake might be the likeliest outcome for Nippon, he said.

“I don’t necessarily think an extension of the CFIUS review is a green light for majority ownership,” Mr. Gibbs said.

He wondered if it might be the Trump administration’s way of “sweeping under the rug” U.S. Steel’s lawsuit, giving the company what it wants — another bite at the apple — and buying the administration more time to negotiate the terms of Nippon’s engagement.

“And that way, Trump could say, ‘Look, we ran a fair CFIUS process. You’re still unable to buy it.’ ”

Jason Zugai, a mobile equipment trainer at U.S. Steel’s Irvin Works and vice president of USW Local 2227, was more encouraged by the news. He has been expecting some kind of decision from Washington ever since he traveled to the White House last week for the official announcement of sweeping global tariffs. While there, he got a few minutes with Vice President JD Vance to talk about U.S. Steel.

“He asked if we were for the deal,” Mr. Zugai recalled. “I said yes,” estimating that the vast majority of workers at Mon Valley plants were in favor.

When he asked Mr. Vance about the administration’s stance, “he told me that they were talking about it behind the scenes.”

“We need this deal to go through,” Mr. Zugai said, back at work on Monday. “Without these investments from Nippon, our facility won’t last.”

U.S. Steel has about 22,000 employees worldwide, with about 4,000 in this region.

Meanwhile, another group of local stakeholders is using Monday’s announcement as an opportunity to call attention to the condition of local U.S. Steel plants and the Mon Valley communities that host and surround them.

The Breathe Project, an environmental nonprofit, said questions remain about what a potential resurrection of the deal and Nippon’s reported promise to invest $7 billion in U.S. Steel’s facilities mean “in terms of plant designs and operations.”

“To what extent will these investments address ongoing, negative health impacts from outdated facilities while also addressing unnecessary climate pollution that will guarantee the investments will not become stranded assets in the near future?” the group said.

U.S. Steel’s stock price finished the day up 16% on the news.

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