Trump Holds Golden Share Power in Controversial US Steel Takeover

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The decision to grant a sitting US president a direct stake in the operations of an iconic American steelmaker is highly unusual. With Nippon Steel’s $14 billion takeover of US Steel now tied to a unique national security provision, former President Donald Trump will hold a so-called “golden share” that gives him veto power over decisions that could shift steel production overseas or weaken America’s industrial base. While Nippon Steel has pledged an $11 billion modernization plan, this political twist is fueling debate about foreign investment, national security, and the future of thousands of American steelworkers.

How Nippon Steel secured control over US Steel amid national security hurdles

The road to this deal has not been smooth. For more than a year and a half, Nippon Steel, Japan’s largest producer and one of the world’s top three steelmakers, faced resistance from labor unions, security agencies, and political leaders concerned about losing a strategic asset to a foreign company.

Pennsylvania, where US Steel is based, has long been a key battleground in presidential elections. Concerns that the buyout could jeopardize local jobs and reduce domestic steelmaking capacity forced Nippon Steel to negotiate a rigorous national security agreement with the federal government.

At the core of these negotiations were anxieties about global steel competition. Chinese producers dominate the global market, and the combined Nippon-US Steel entity will rank as the world’s fourth-largest steelmaker. The United Steelworkers union raised alarms about possible plant closures and the offshoring of jobs.

To address these concerns, Nippon Steel committed to significant capital improvements. The company pledged to invest $11 billion to modernize outdated mills and introduce advanced production methods to US Steel’s operations. But these promises were not enough to resolve security concerns on their own. That is where the golden share comes into play.

The unusual golden share provision gives Trump direct veto power

The golden share is an unusual tool in corporate governance, more common in European privatizations than in US mergers. In this case, the provision gives Trump, or someone he appoints, the authority to block decisions that could change US Steel’s name, move its headquarters, close plants, transfer jobs overseas, or reduce Nippon’s capital commitments.

The language in the agreement makes this clear: while Trump is president, he alone, or his designee, holds this authority. When another president takes office, these powers revert to the Treasury and Commerce departments. This unusual structure raises questions about the balance between corporate governance and national security oversight when they intersect with presidential authority.

Supporters say the clause protects jobs and ensures US Steel remains anchored in Pennsylvania and other traditional steelmaking regions. Critics argue it grants a sitting president unusual control over a private company’s decisions and could set a complicated precedent for future foreign investment reviews.

What this means for American steelworkers and Pennsylvania’s economy

At the center of this debate are the steelworkers themselves. Once a symbol of US industrial power, US Steel has struggled to modernize its aging plants and compete with low-cost global producers.

Nippon Steel’s pledge to invest $11 billion could help update outdated plants with newer technology, potentially preserving thousands of union jobs for now. The golden share provision means that plant closures and reductions in capital spending cannot happen without presidential consent during Trump’s term.

In Pennsylvania, a state that can decide the outcome of presidential elections, the stakes are significant. Trump’s direct role in the deal gives him influence with labor voters who feel left behind by decades of industrial decline. For the United Steelworkers union, the fight is far from over. Many workers worry that despite the capital injection, long-term promises could weaken once a new administration takes control.

The broader impact on foreign investment and national security policy

Beyond steel, this arrangement may change how future deals in critical industries are handled. Granting a golden share connected to a single president’s term is unprecedented in the US. National security reviews have blocked foreign takeovers in the past, but they rarely result in the White House holding a board-level seat.

The Biden administration previously promised to stop the deal, echoing concerns about foreign influence and job security. Trump’s decision to recast it as a partnership signals a different approach. Whether future presidents adopt similar tools remains to be seen.

The outcome may shape how investors view other industries considered vital to national security, including semiconductors and defense. As the US tries to balance openness to foreign capital with domestic supply chain protection, the golden share arrangement in US Steel could stand as an unusual example for deals yet to come.

In a sector where aging mills, union jobs, and national politics converge, US Steel’s future now depends on more than just technological improvements or new capital. It is bound by a unique legal provision that places key decisions in the hands of a president. Workers, investors, and policymakers will be watching closely as the country’s steel industry navigates this unusual experiment.

Sources:

• AP News