On June 13, U.S. Steel and Nippon Steel, the Japanese company acquiring the former, signed a national security pact that would give the White House a stake in U.S. Steel and the ability to influence its board and veto certain company decisions.
The terms of the deal were made over the previous two days before its finalization.
The Trump administration won better terms for the deal. Nippon Steel desired the White House’s control of U.S. Steel to last only for the remainder of Trump’s term, but Commerce Secretary Howard Lutnick prevailed in his argument that the control should last indefinitely. The White House can control the outsourcing of U.S. Steel jobs and production, the closure or idling of plants, and “how it sources its raw materials.”
Under the terms of the national security pact, which the companies said they signed Friday, the U.S. government would retain a single share of preferred stock, called class G — as in gold. And U.S. Steel’s charter will list nearly a dozen activities the company cannot undertake without the approval of the American president or someone he designates in his stead.
The New York Times
Despite the merger being described as a “partnership,” Nippon Steel is still acquiring U.S. Steel as the superior partner.
This deal represents yet another instance of Trump acting contrary to the political identity he has established, especially during his three presidential campaigns: that of a free-market capitalist and working class champion.
The golden share is highly unusual. The United States has only taken stakes in companies in the event of a crisis, such as the 2008 recession, or if the company has a critical role in the economy. While Trump has suggested privatizing some companies under government conservatorship, such as Fannie Mae and Freddie Mac, he is doing the opposite in reality: taking more control. This is more common in countries with centralized economies that feature more strategic planning, such as China.
David McCall, the president of the United Steelworkers union, viewed the deal as a betrayal. He is correct, as Trump lied about his stance on the deal in the 2024 election, in which he pledged to block the deal.
“We’re disappointed that President Trump reversed course, jeopardizing the future of American steel making by allowing the merger, now described as a ‘partnership,’ despite over a year of the president speaking forcefully against it,” he said.
The New York Times
