Trump gets 'golden share' power in US Steel buyout. US agencies will get it under future presidents

Key Points

• President Donald Trump holds a “golden share” in the national security agreement for Nippon Steel’s buyout of U.S. Steel, granting him the power to appoint an independent board member and veto decisions affecting domestic steel production.
• Under Trump’s presidency, he or a designee controls those decision-making powers, but they revert to the Department of the Treasury and Commerce Department under future presidents.
• Nippon Steel’s nearly $15 billion acquisition of Pittsburgh-based U.S. Steel has closed, making U.S. Steel a wholly owned subsidiary and creating the world’s fourth-largest steelmaker with an $11 billion investment commitment to upgrade facilities.
• The golden share provision was added to overcome national security concerns and political opposition, giving the president veto rights over capital commitments, plant closures, job transfers, competing acquisitions, and key trade and sourcing decisions.

HARRISBURG, Pa. (AP) — President Donald Trump will control the so-called “golden share” that's part of the national security agreement under which he allowed Japan-based Nippon Steel to buy out iconic American steelmaker U.S. Steel, according to disclosures with the U.S. Securities and Exchange Commission.

The provision gives the president the power to appoint a board member and have a say in company decisions that affect domestic steel production and competition with overseas producers.

Under the provision, Trump — or someone he designates — controls that decision-making power while he is president. However, control over those powers reverts to the Treasury Department and the Commerce Department when anyone else is president, according to the filings.

The White House responded in a statement that the share is “not granted to Trump specifically, but to whoever the president is" when asked why Trump will directly control the decision-making and why it goes to the Treasury and Commerce departments under future presidents.

Still, the wording of the provision is specific to Trump.

It lists what decisions cannot be made “without, ... at any time when Donald J. Trump is serving as President of the United States of America, the written consent of Donald J. Trump or President Trump’s Designee” or “at any other time, the written consent of the CMAs,” a contractual term for the Treasury and Commerce departments.

Nippon Steel's nearly $15 billion buyout of Pittsburgh-based U.S. Steel became final last week, making U.S. Steel a wholly owned subsidiary.

Trump has sought to characterize the acquisition as a "partnership" between the two companies after he at first vowed to block the deal — as former President Joe Biden did on his way out of the White House — before changing his mind after he became president.

The national security agreement became effective June 13 and is between Nippon Steel, as well as its American subsidiary, and the federal government, represented by the departments of Commerce and Treasury, according to the disclosures.

The complete national security agreement hasn't been published publicly, although aspects of it have been outlined in statements and securities filings made by the companies, U.S. Steel said Wednesday.

The pursuit by Nippon Steel dragged on for a year and-a-half, weighed down by national security concerns, opposition by the United Steelworkers and presidential politics in the premier battleground state of Pennsylvania, where U.S. Steel is headquartered.

The combined company will become the world’s fourth-largest steelmaker in an industry dominated by Chinese companies, and bring what analysts say is Nippon Steel’s top-notch technology to U.S. Steel’s antiquated steelmaking processes, plus a commitment to invest $11 billion to upgrade U.S. Steel facilities.

The potential that the deal could be permanently blocked forced Nippon Steel to sweeten the deal.

That included upping its capital commitments in U.S. Steel facilities and adding the golden share provision, giving Trump the right to appoint an independent director and veto power on specific matters.

Those matters include reductions in Nippon Steel’s capital commitments in the national security agreement; changing U.S. Steel’s name and headquarters; closing or idling U.S. Steel’s plants; transferring production or jobs outside of the U.S.; buying competing businesses in the U.S.; and certain decisions on trade, labor and sourcing outside the U.S.

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