What Trump’s ‘golden share’ in US Steel has in common with his plan to ‘watch’ Walmart

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What Trump’s ‘golden share’ in US Steel has in common with his plan to ‘watch’ Walmart

President Trump has embraced a plan for Japanese-owned Nippon Steel (NPSCY) to purchase US Steel (X), largely, it seems, due to a notion that the US government will be getting a “golden share” as part of the bargain.

The president touted the merger during a rally Friday evening in West Mifflin, Pa., at a company steel processing plant where he touted a $14 billion investment from Nippon in American mills and production and promised to increase existing tariffs on steel imports to 50% from 25%.

US Steel will “continue to be controlled by the USA and we are going to be working together,” he said, and “we are going to have an amazing alliance.” It echoed remarks he made to reporters recently when he said the deal will include Nippon making “an investment, and it’s a partial ownership, but it’ll be controlled by the USA.”

For now, details remain scarce, but the idea of a “golden share” as part of Nippon’s takeover of US Steel is being touted by Trump’s allies and appear set to provide the president with yet another avenue for close involvement in the inner workings of a company.

This coming provision is also part of a larger trend (with roots that stretch back years across Democratic and Republican administrations) that has seen Washington, D.C., move to have an increasing say in the day-to-day operations of major companies.

Another key front is an ongoing campaign by Trump to force Walmart (WMT) and other retailers to “eat” tariff price hikes, with the president promising a public pressure campaign with perhaps more direct measures when it comes to those companies’ individual pricing decisions.

“I’ll be watching,”

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the retailer.

The push by Trump for this “golden share” in US Steel also comes as other components of the still-to-be-finalized deal appear largely unchanged from last year, a setup that both Trump (and ex-President Biden) campaigned against.

Sen. Dave McCormick of Pennsylvania has been involved in the talks and

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that included “a US CEO, a US majority board, and then there’ll be a golden share, which will essentially require US government approval of a number of the board members, and that’ll allow the United States to ensure production levels aren’t cut and things like that.”

Most of that outline — save the “golden share” concept — was promised by Nippon either immediately or soon after it announced its plan to buy the company in 2023.

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Trump has also taken to calling the deal a “planned partnership” — as he did in

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on May 23 announcing his support — even as multiple reports of the deal negotiations themselves suggest Nippon is set to going ahead with its plan to purchase US Steel and make it a subsidiary of its much larger operation.

US Steel

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. Nippon’s current number is about four times that.

Trump’s apparent blessing of the deal is a sharp reversal of his position during the campaign, where he promised to block the merger “instantaneously.”

Many details of the possible setup remain unclear, such as whether Trump’s golden share will give the government a literal equity stake in the combined company or simply the power to veto certain moves going forward.

What also remains to be seen is how much leverage the US will have going forward in addition to levers the US currently uses to keep tabs on foreign-owned companies through the Committee on Foreign Investment in the United States (known as CFIUS).

This is the agency that is tasked with reviewing foreign transactions and was involved

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,

Also unclear is if Nippon itself is on board with Trump’s plans; the company has not responded to queries on its approach to the talks.

President Donald Trump speaks in the Oval Office of the White House on May 28. (Andrew Harnik/Getty Images) · Andrew Harnik via Getty Images

Other nations have historically entered into this type of “golden share” arrangement, which typically is a special class of shares that does confer some ownership as well as outsized voting power to block certain moves.

These types of arrangements are largely unheard of in recent US history with one notable exception: the 2008-2010 auto industry bailout during the Obama/Biden administration that saw the US take a stake in General Motors (GM) and Chrysler, which is now Stellantis (STLA) North America.

The government didn’t stay invested for long, selling the last of its stake in Chrysler in 2011 and in GM in 2013.

The “golden share” idea has also raised questions as to whether a similar concept will be included in any deal to keep TikTok operating in the US, but Trump appeared to bat down that notion recently to reporters.

“Nothing to do with TikTok,”

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after being asked about a golden share there. “Totally different kind of deal.”

Beijing has nominal stakes — but ******** law allows it outsized control — in the operations of companies like Alibaba (BABA) and, notably, TikTok’s parent company, Bytedance.

Then-President Joe Biden traveled to West Mifflin, Pennsylvania in September — the same town Trump is visiting this week — in part to underline his opposition to the Nippon/US Steel deal.. (MANDEL NGAN/AFP via Getty Images) · MANDEL NGAN via Getty Images

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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#Trumps #golden #share #Steel #common #plan #watch #Walmart

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