US Steel buyout gives Trump a new power: What about future presidents?
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 American steelmaker US Steel. That's according to disclosures filed with the US 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". Officials were 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 'the written consent of Donald J. Trump or President Trump's Designee' at 'any time when Donald J. Trump is serving as President of the United States of America' 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 US Steel became final last week, making US Steel a wholly-owned subsidiary.
Trump has sought to characterise 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 13 June 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, US 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 US 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 US Steel's antiquated steelmaking processes. That's on top of a commitment to invest $11bn to upgrade US 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 US Steel facilities and adding the golden share provision, giving Trump a veto power on specific matters and the right to appoint an independent director.
Those matters include reductions in Nippon Steel's capital commitments in the national security agreement; changing US Steel's name and headquarters; closing or idling US Steel's plants; transferring production or jobs outside of the US; buying competing businesses in the US; and certain decisions on trade, labour and sourcing outside the US.
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