HARRISBURG, Pa. — A significant provision in the national security agreement concerning Japan-based Nippon Steel’s acquisition of U.S. Steel gives President Donald Trump a distinct level of control. According to filings with the U.S. Securities and Exchange Commission, this “golden share” empowers the president to influence board appointments and significant company decisions related to domestic steel production and international competition.
While Trump holds this authority during his presidency, the control transitions to the U.S. Treasury and Commerce Departments when another president takes office. In a statement, the White House emphasized that the share isn’t specifically granted to Trump personally but to whoever occupies the presidency. However, documentation specifies Trump’s name, indicating that decisions cannot be made without the written consent of Trump or a designated individual during his presidency. Outside of this period, the Treasury and Commerce departments take over the decision-making capacity.
The official process surrounding the nearly $15 billion transaction, which turned Pittsburgh-based U.S. Steel into Nippon Steel’s wholly owned subsidiary, finalized last week. Initially, Trump characterized this acquisition as a “partnership,” despite promising to block it during his campaign, aligning with former President Joe Biden’s earlier stance. The national security agreement, now official since June 13, was brokered with the involvement of the Commerce and Treasury departments, Nippon Steel, and its American counterpart.
While the complete details of this national security agreement remain undisclosed, certain provisions have been outlined in statements and financial disclosures. This lengthy acquisition process stretched over 18 months, shadowed by national security apprehensions, resistance from the United Steelworkers, and the intricate politics of Pennsylvania, where the headquarters of U.S. Steel is located.
This merger positions the new entity as the fourth-largest steel producer worldwide, an industry crowded with dominant Chinese firms. Analysts suggest that Nippon Steel’s technological advancements could modernize U.S. Steel’s older production methods, with a commitment of $11 billion set aside to upgrade its facilities.
Faced with the potential of the deal being obstructed, Nippon Steel enhanced its proposal, which included increased investment in U.S. Steel and the implementation of the “golden share.” This provision allows Trump to appoint an independent director and grants veto power over key business decisions affecting capital investment, plant operations, and strategic business actions within the United States, as well as activities regarding trade, labor, and sourcing.