A deep dive into the implications of the 'golden share' deal highlights its potential to reshape foreign investment dynamics in the U.S.
**Trump's Secured 'Golden Share' Deal with Nippon Steel Reshapes U.S. Steel Ownership**
**Trump's Secured 'Golden Share' Deal with Nippon Steel Reshapes U.S. Steel Ownership**
In a controversial maneuver, Trump administration establishes unprecedented control over U.S. Steel through a secure arrangement with Nippon Steel.
To facilitate its acquisition of U.S. Steel, Japan’s Nippon Steel has forged an unprecedented agreement that grants the U.S. government extraordinary leverage over the American company. This arrangement, termed a “golden share,” allows the White House, under President Donald Trump, significant influence over U.S. Steel’s operations and decisions. Such a move could fundamentally alter the landscape of foreign investments in the United States.
Details have emerged regarding the structure of this deal, indicating a permanent stake for the U.S. government, which not only affects U.S. Steel's board of directors but also encompasses veto rights on numerous company initiatives. The negotiations unfolded late into the night between the Trump administration and Nippon Steel’s representatives, who had previously sought to buy U.S. Steel but faced obstacles due to national security issues raised by the Biden administration.
Initially, Nippon Steel proposed that the government’s control be time-limited, ideally expiring within three to four years, coinciding with Trump’s presidency. However, discussions led by Commerce Secretary Howard Lutnick determined that the “golden share” would be eternal, granting timeless power to future presidents.
The finalized agreement stipulates that the U.S. government will hold a unique class of preferred stock designated as class G—symbolizing its exclusive rights. Furthermore, U.S. Steel's amended charter will impose restrictions on various actions that the company cannot proceed with without explicit approval from the president or his appointed delegate, signaling a dramatic shift in U.S. corporate governance vis-a-vis foreign investments.
Details have emerged regarding the structure of this deal, indicating a permanent stake for the U.S. government, which not only affects U.S. Steel's board of directors but also encompasses veto rights on numerous company initiatives. The negotiations unfolded late into the night between the Trump administration and Nippon Steel’s representatives, who had previously sought to buy U.S. Steel but faced obstacles due to national security issues raised by the Biden administration.
Initially, Nippon Steel proposed that the government’s control be time-limited, ideally expiring within three to four years, coinciding with Trump’s presidency. However, discussions led by Commerce Secretary Howard Lutnick determined that the “golden share” would be eternal, granting timeless power to future presidents.
The finalized agreement stipulates that the U.S. government will hold a unique class of preferred stock designated as class G—symbolizing its exclusive rights. Furthermore, U.S. Steel's amended charter will impose restrictions on various actions that the company cannot proceed with without explicit approval from the president or his appointed delegate, signaling a dramatic shift in U.S. corporate governance vis-a-vis foreign investments.
