President of Harrisburg, Pa.According to filings made to the U.S. Securities and Exchange Commission, Donald Trump will own the so-called golden share that is a component of the national security pact under which he permitted Japan-based Nippon Steel to acquire the venerable American steelmaker U.S. Steel.
The clause grants the president the authority to choose a board member and to influence business choices that impact domestic steel production and the ability to compete with foreign manufacturers.
The clause states that while Trump is president, that decision-making authority is controlled by him or a representative he appoints. According to the documents, however, when someone else is president, jurisdiction over such functions returns to the Treasury Department and the Commerce Department.
When asked why Trump will have direct power over decision-making and why the Treasury and Commerce departments will receive the share under future presidents, the White House said in a statement that the share is not awarded to Trump explicitly, but to whoever the president is.
However, the provision’s phrasing is unique to Trump.
It outlines what decisions cannot be made without, among other things, the written consent of the CMAs, a contractual requirement for the Treasury and Commerce departments, or the written consent of Donald J. Trump or President Trump’s Designee at any point while he is serving as President of the United States of America.
Last Monday, Nippon Steel completed its roughly $15 billion acquisition of Pittsburgh-based U.S. Steel, turning it into a wholly owned subsidiary.
After initially vowing to oppose the merger, as former President Joe Biden did on his way out of the White House, Trump has attempted to depict the acquisition as a “partnership” between the two firms. However, he changed his mind after taking office.
According to the disclosures, the national security pact, which went into effect on June 13, is between the federal government, represented by the departments of Treasury and Commerce, and Nippon Steel and its American subsidiary.
Aspects of the national security pact have been described in the firms’ comments and securities filings, but the full agreement has not been made public, U.S. Steel said Wednesday.
Concerns about national security, resistance from the United Steelworkers, and presidential politics in Pennsylvania, the state where U.S. Steel is headquartered, caused the chase by Nippon Steel to go on for a year and a half.
In an industry dominated by Chinese firms, the combined company will rank as the fourth-largest steelmaker in the world. It will also upgrade U.S. Steel facilities with an investment of $11 billion and introduce what analysts say is Nippon Steel’s superior technology to U.S. Steel’s outdated steelmaking processes.
Nippon Steel was compelled to sweeten the agreement because of the possibility that it would be banned permanently.
Adding the golden share clause, which grants Trump the authority to designate an independent director and veto certain issues, and increasing its capital commitments in U.S. Steel facilities were two examples of this.
Reductions in Nippon Steel’s capital commitments under the national security agreement, changes to U.S. Steel’s name and headquarters, closing or idle U.S. Steel plants, moving production or jobs abroad, purchasing rival companies in the United States, and specific decisions regarding trade, labor, and sourcing abroad are some of these issues.
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