Trump invalidated the company’s decision to halt operations at the Granite City plant by using the “golden share” authority granted to him under the Nippon Steel deal for the first time.
What does a golden share mean?
A golden share gives the government veto power over certain strategic decisions. The Trump administration had made this a condition to approve Nippon Steel’s $14.1 billion acquisition of US Steel in June. The new regulation grants the U.S. President broad powers, covering factory closures, relocations, wage changes, and major operational decisions.
Crisis and intervention at Granite City
Two weeks ago, US Steel announced that production at the Granite City plant would stop in November, leaving 800 employees jobless. The company had planned to continue paying its workers despite the shutdown. However, as soon as U.S. Secretary of Commerce Howard Lutnick learned of the plan, he called US Steel CEO Dave Burritt, stating that Trump would exercise the “golden share” authority and the closure was not allowed.
In an interview with CNBC, Lutnick described US Steel’s plan to continue wage payments while production was halted as “nonsense.” Following this, the company backtracked, announcing that plate consumption at Granite City would continue and that they had found a solution to maintain operational flexibility.
Union and public response
Union leaders had opposed Nippon Steel’s acquisition from the beginning, warning that the company might close U.S. plants and replace them with imported steel. Trump’s intervention has, for now, alleviated these concerns. However, the White House, the Commerce Department, and US Steel did not respond to Fortune’s inquiries.
Expanding political oversight
Trump’s move with US Steel is the latest example of the U.S. government increasing its influence over the private sector. Previously, Nvidia and AMD agreed to pay 15% of revenues from chips sold to China to the government. The Trump administration also became the largest shareholder in Intel through an $8.9 billion stake purchase, while the Department of Defense became the main shareholder of MP Materials, a rare earth mining company.
Experts say that going forward, investors will need to consider not only regulatory risks but also the possibility that the executive branch could directly veto operational decisions.
Comparison with global examples
The golden share mechanism is not new. Countries like the UK, Brazil, and China have long used similar mechanisms in defense, aviation, and infrastructure sectors to maintain state influence. However, the U.S. move is unprecedented in scope.
The Granite City intervention has temporarily eased concerns for the local economy and 800 workers. However, experts warn that Trump’s expanding powers could create long-term uncertainty in both the steel industry and the broader business environment.
Comments
No comment yet.