President Donald Trump will play a significant role in the operations of U.S. Steel, following an unusual investment by Nippon Steel of Japan in the renowned American steelmaker. Recent revelations from the administration have provided more clarity about the “golden share” arrangement that the federal government has established as a precondition for supporting the transaction. The steel company based in Pittsburgh, in collaboration with Nippon Steel, intends to inject $11 billion in new investments by 2028. This decision is part of advancing a deal compliant with a national security agreement approved by the White House.
The administration portrays this deal as a “partnership” and “investment” by Nippon Steel in U.S. Steel, despite Nippon Steel’s clear intention to fully acquire and manage U.S. Steel as a subsidiary capable of being worth nearly $15 billion as per their initial offer made late in 2023. In a social media post, Commerce Secretary Howard Lutnick elaborated on the operation of the “golden share” held by the president, indicating the government’s active involvement in private corporate affairs, all while saying their goal is to remove excessive regulations to foster business growth.
The outlined “golden share” means U.S. Steel’s headquarters cannot be moved from Pittsburgh without Trump’s approval. The company name cannot be altered, facilities cannot be closed, and production or jobs cannot be relocated overseas. Similarly, the company cannot re-incorporate externally without presidential consent. Furthermore, any reduction or postponement of the planned $14 billion investments requires the president’s agreement. Lutnick emphasized that the share’s clauses bolster and shield American interests, particularly in Pennsylvania and among the country’s steelworkers and manufacturers who gain access to more domestic steel.
This sharp $14 billion figure was overlooked during Friday’s revelation by Trump as he sanctioned the investment through an executive order in alignment with the national security guidelines. Pennsylvania’s lawmakers suggest that the amount includes the expense for an electric arc furnace that Nippon Steel envisions for the U.S., elevating the deal’s worth to a minimum of $28 billion.
Furthermore, the deal allows the president the power to appoint one independent director of the corporate board while possessing veto rights over the selection of two others, as shared by a confidential source with knowledge of the agreement. This unique board structure was highlighted by The New York Times earlier. These developments coincided with Trump’s Alberta visit in Canada for the Group of Seven summit.
Nonetheless, there’s some ambiguity about the agreement’s complete aspects, with neither the companies nor the government making public the comprehensive details regarding Nippon Steel’s acquisition or the ensuing security document. The United Steelworkers union, representing U.S. Steel’s workforce, expressed concerns through a letter over Trump’s decision to reverse his earlier stance against Nippon Steel’s acquisition, questioning the company’s future ownership structure.
The union voiced disappointment at the administration’s change of heart and pointed out the lack of transparency regarding the transaction’s terms. With the labor agreement on the horizon to expire on September 1, 2026, the union is determined to negotiate for fair contracts with the new proprietors.
Trump’s potential influence over U.S. Steel’s labor negotiations could become critical, especially with midterm elections on the way, as the president might be directly involved in deliberations concerning salaries and benefits for unionized workers. President Joe Biden, preceding Trump, had previously stepped in to hinder Nippon Steel’s acquisition via the Committee on Foreign Investment in the United States review. Trump’s eventual election led to reconsidering a potential agreement, facilitating another review that brought forth the “golden share” strategy to address national security and prioritize U.S. domestic steel production interests.
Through this process, Nippon Steel has extended multiple commitments, gradually promising more financial investments in U.S. Steel, guaranteeing the preservation of its headquarters in Pittsburgh, establishing a board with a predominantly American membership, and operating U.S. plants continuously. Additionally, they vowed U.S. Steel’s involvement in trade, denying any intent to introduce competing imported steel slabs to their facilities in Pennsylvania and Indiana.