Trump wields ‘golden share’ to halt U.S. Steel plant shutdown, WSJ reports
News Summary
The Trump administration has intervened to stop U.S. Steel from idling operations at its Granite City, Ill., plant, exercising new powers tied to the company’s recent takeover, the Wall Street Journal reported. U.S. Steel had informed nearly 800 workers that the plant would close in November, although they would still be paid. However, after Commerce Secretary Howard Lutnick warned CEO Dave Burritt that the administration wouldn’t allow it, U.S. Steel reversed course on Friday, stating the facility would keep rolling slabs into sheet steel. This intervention marks Trump's first use of so-called “golden share” rights, a condition of the $14.1 billion takeover by Japan’s Nippon Steel, which cleared in June. The national-security agreement granted the White House veto power over plant closures, offshore production shifts, and other strategic decisions. The move highlights Trump’s growing hand in the private sector, following his administration’s announcement last month to take a 10% stake in Intel after the chipmaker received billions in subsidies.
Background
In June 2025, the $14.1 billion takeover of U.S. Steel by Japan’s Nippon Steel was cleared. This acquisition agreement included a critical national-security clause, granting the U.S. government so-called “golden share” rights, allowing it to veto strategic decisions by U.S. Steel, including plant closures and production shifts. When the deal was announced, President Trump assured U.S. Steel workers that Nippon Steel would be a “great partner,” promising no layoffs, “no outsourcing whatsoever,” and a $5,000 bonus for workers. This intervention to stop the Granite City plant closure marks the first time the Trump administration has exercised these “golden share” powers. Furthermore, last month, the Trump administration announced it would take a 10% stake in Intel after the chipmaker received billions in subsidies under the 2022 Chips Act. These actions reflect the Trump administration's strong protective stance on domestic manufacturing and employment under its "America First" policy.
In-Depth AI Insights
What are the broader implications of the first use of the “golden share” for the U.S. M&A landscape? - This intervention sets a precedent for direct government veto power in critical industry M&A, likely leading to more stringent scrutiny and conditional approvals for future deals involving national security or strategic assets. - Investors and corporations will need to more thoroughly factor in political risk and the potential for government intervention when evaluating prospective transactions, potentially complicating deal structures or causing some investors to reconsider their appetite for strategic U.S. industrial investments. - In the long term, such government intervention could deter foreign direct investment (FDI) into U.S. sectors deemed “strategic,” as investors may fear their operational decisions could be constrained by non-market factors. How is the Trump administration's industrial policy evolving, and what does this signify for its “America First” agenda? - This action indicates a deepening of the Trump administration's industrial policy, moving beyond subsidies and trade protectionism to direct control over private enterprise operational decisions, signifying a reinforcement of its “America First” agenda. - Such intervention aims to ensure critical production capacity and jobs remain domestically, even if this contradicts principles of market efficiency or shareholder value maximization. - It could incentivize other nations to adopt similar interventionist measures to protect their own strategic industries, thereby intensifying nationalistic trends in global trade and investment, and potentially sparking new international trade frictions. How should investors adjust their strategies to navigate this increasing government intervention in the private sector? - Investors should prioritize identifying industries and companies likely to be deemed of “national security” or “strategic” importance by the government, and carefully assess their exposure to political risk, including potential operational restrictions or M&A hurdles. - Focus on domestic companies highly aligned with government objectives or those that could benefit from protectionist policies, as they may receive policy support or be shielded from overseas competition. - For foreign investors, heightened vigilance is required regarding additional compliance costs and operational uncertainties that might arise from investing in strategic U.S. assets, potentially necessitating a re-evaluation of their U.S. market exposure.