Latest news with #USSteel
National Post
4 hours ago
- Business
- National Post
Colby Cosh: How Donald Trump nationalized U.S. Steel
Last week, Nippon Steel Corp. of Japan formally completed a takeover of U.S. Steel (USS), the venerable but diminished American industrial giant created by J.P. Morgan in 1901. The Japanese company originally placed its bid for USS in late 2023, but it ran into immediate trouble with the Biden administration. U.S. Steel, once widely regarded as an overmighty pollution-spewing relic of Gilded Age cartelization, had magically evolved to become a vulnerable 'national champion' of morally superior things-making industries; and the company still has a powerful unionized workforce in U.S. rust-belt states that are electorally pivotal. Pennsylvania-born President Joe Biden wasn't going to let a corporate brand virtually synonymous with the city of Pittsburgh be raffled off without a tussle. Article content Article content Government foreign-investment approvals necessarily have this sort of personal-rule character wherever they happen, which is pretty much everywhere. If you want to sell a bundle of industrial assets in Country X to folks from Country Y, you had better have approval from the top political boss of X, whether that approval be tacit or explicit. Article content Article content Article content Still, Biden did go through the motions of being head of a government of laws rather than men. He had a U.S. Treasury Department panel, the Committee on Foreign Investment in the United States (CFIUS), whack together an indecisive but fact-based report on the potential costs and benefits of the proposed takeover. Only at that point, with mere days remaining in his term of office, did Biden (or whoever was wielding his executive autopen) fully and officially block the Nippon Steel deal. Biden's successor had already been re-elected, and nobody could imagine that Donald Trump would be any less of an unruly economic nationalist — but the thing that is nearest and dearest to Trump's heart is deal-making, and Nippon Steel found a way to get the takeover done. The Japanese company had already promised to preserve U.S. Steel's Pittsburgh national head office and to honour existing collective-bargaining agreements with the unions. Trump extracted further concessions on investments and hiring, along with a means of enforcing them, namely a 'golden share' controlled by the U.S. government. Article content A 'golden share' is a special kind of equity that gives its holder veto power over specified corporate decisions. It is often used in privatizations to give governments some vestige of control over corporate entities originally created by the state (or, in Canada, the Crown) for public purposes. In this unusual case, the U.S. government is magically gaining a golden share in exchange for permitting the sale of one private company to another. The government will be given the right to choose some U.S. Steel board directors, to forbid any name change, and to veto factory closures, offshoring, acquisitions and other moves. Article content As the Cato Institute immediately pointed out, this is a de facto nationalization of U.S. Steel — the sort of thing that would have had Cold War conservatives climbing the walls and hooting about socialism. But at least socialism professes to be social! Yesterday a lefty energy reporter named Robinson Meyer was nosing around in the revised corporate charter for the newly-acquired U.S. Steel, and he discovered a remarkable detail that the Cato folks had missed: the decision powers of the golden share have been legally assigned to Donald Trump in person and by name for the duration of his presidency. Only after Trump has left the White House do those golden-share powers revert to actual U.S. government departments (Treasury and Commerce).
New York Post
a day ago
- Business
- New York Post
Trump aims for trade deals with key partners in Asia in coming weeks: sources
Remember those simpler times when markets were focused on tariffs instead of war? Well, with the markets starting to look past the 12-day flareup between Israel and Iran, and our involvement in (hopefully) decapitating Tehran's nuclear efforts, tariffs might soon be back on the table for another round of market-induced ruction, On The Money has learned. Team Trump says it's close to announcing a handful of trade deals, my Wall Street sources with contacts in the White House tell me. 4 The White House says they're making headway on trade deals with Japan, as well as South Korea and Vietnam. Jack Forbes/NY Post Design I know we've heard this before without much real progress, but the big ones that the White House says they're making headway on involve Japan, as well as South Korea and Vietnam, these people say. India was thought to be a done deal, but its armed conflict, however brief, with Pakistan threw off the talks with US trade negotiators. That deal could re-emerge but it's not on the list of those that are pending, the sources say. 'They're supposed to be coming up in the next few weeks,' is how one of my Wall Street sources described the current situation. 'India seems to be moving a bit slower. But deals are supposedly coming.' July 9 is a key date. It's when Trump's tariff pause against most trading partners ends. China's tariff pause ends Aug. 12. In the meantime, we could get some more extensions or rushed frameworks, my Wall Street sources suggest. The Japan deal appears most promising since the Trump administration just approved the takeover of US Steel by Japan's Nippon Steel, with the proviso that the White House hold what's known as a 'golden share,' a special category of stock in the new company that gives the US some authority over decision-making. Yes, a little bit of socialism from the alleged free market types in the White House, but it's suggesting a broader trade deal with the Japanese is in the works, my sources say. 4 July 9 is a key date. It's when Trump's tariff pause against most trading partners ends. China's tariff pause ends Aug. 12. In the meantime, we could get some more extensions or rushed frameworks, sources say. Getty Images The impetus behind a deal with Vietnam is that it could be a place where US businesses set up if they leave China, one of our major trade adversaries. Plus, the Trump Organization has looked at investment in the Communist country. The Vietnam War is a distant memory as Hanoi continues integrating capitalism into its economy and seeking closer ties with the US. South Korea, meanwhile, is a long-time ally and the trade talks with the country have been progressing, sources said. Remember, if and when all of the above happens, these won't be official deals, but frameworks much like the one crafted with the UK that sets conditions before various regulatory reviews take place and deals are, as they say, sealed. But they could be a market positive because they should produce levies that are lower than what Trump originally demanded in his 'Liberation Day' tariffs attack against the world on April 2. 4 Trump announced his 'Liberation Day' tariffs on April 2. REUTERS They should also provide US businesses with some clarity on the cost of importing goods from major trading partners. That said, making tariffs the focus could have some negative market consequences since investors have been focused on a possible peace dividend from a defanged Iran. The potentially inflation-inducing costs on many goods consumed by average Americans from tariffs could once again weigh heavily on the economy. Recall how stocks and bonds tanked over fears of inflation and a possible economic slowdown from a tariff-induced price shock. Trump has since paused his tariff regime until deals could be worked out, but the zig-zagging nature of the talks are starting to weigh on business and consumers. 4 Stocks and bonds tanked over fears of inflation and a possible economic slowdown from a tariff-induced price shock. REUTERS Retailers like Walmart, who rely on cheap goods imported from China, have raised prices even as intense trade negotiations between Treasury Secretary Scott Bessent and Beijing continue. The latest consumer confidence numbers sank a bit, another likely indication that costs are being passed on. Fed Chair Jerome Powell has ruled out cutting interest rates until he sees if the tariffs will induce inflation, and presumably on what deals Team Trump is cutting. And it's unclear if those talks are proceeding favorably with what might be the country's most important trade partner given its large consumer base and ability to manufacture stuff that is too costly to build here. That would be China. Even though we are economic and maybe military adversaries, we need each other, and China President Xi Jinping is a tough negotiator. A deal with the European Union, another major trading partner, is also slow going. Seems like for better or worse, trade will be back moving markets.
Japan Times
a day ago
- Business
- Japan Times
Trump himself will wield U.S. Steel ‘golden share' superpowers
U.S. President Donald Trump will personally exercise a degree of control over United States Steel, now 100% owned by Japan's Nippon Steel. In a June 18 filing to the U.S. Securities and Exchange Commission, the American steelmaker disclosed that Trump is empowered with special "golden share" authorities while he is in office, or he can grant those rights to another person. After he leaves office, those powers will devolve to two executive branch departments — the Department of Commerce and the Department of the Treasury — giving future U.S. presidents the same degree of control over the company but indirectly exercised. The golden share allows the holder to overrule certain corporate decisions that could significantly change U.S. Steel and its business, and make certain appointments, although the full terms of the golden share have not been made public. Nippon Steel finalized the acquisition of U.S. Steel last week , following an 18-month battle that involved two national security reviews, an outright rejection by one U.S. president and a subsequent order to reverse that decision made by another president. In exchange for Trump's blessing, the companies signed a national security agreement with the U.S. government, under which a golden share is issued. 'Pursuant to the NSA, and through its ownership of the golden share, the U.S. government will have certain rights with respect to non-ordinary course matters with respect to U. S. Steel, including relating to governance, domestic production and trade matters,' the disclosures read, referring to the National Security Agency. Without the president or his designee's written consent, the following is prohibited: changing U.S. Steel's company name; moving the company headquarters from Pittsburgh or changing the company's domicile to a jurisdiction outside of the U.S.; reducing, waiving or delaying capital investment outlined in the agreement; or idling U.S. Steel plants, barring certain conditions. While certain exceptions apply, U.S. Steel is also prohibited from: acquiring U.S. businesses that compete with it or its suppliers, accepting direct financial assistance from the Japanese government, and making changes to existing raw material and steel sourcing strategies. A pricing mechanism is outlined in the SEC disclosure that prevents the company from selling its output below certain benchmarks. The golden share, which is nontransferable and does not come with dividends, grants the president the right to appoint and remove one independent U.S. Steel director, according to explanatory material published by Nippon Steel last week. Nippon Steel maintains that while the restrictions may look harsh on paper, they do not affect the parent company's ability to exercise control over U.S. Steel. 'We have secured the necessary management flexibility and profitability essential for business investment, and we recognize this agreement as fully satisfactory for our company,' Nippon Steel Chairman and CEO Eiji Hashimoto said at a news conference last week. Some Nippon Steel shareholders have expressed misgivings. At the company's annual shareholders meeting on Tuesday, four out of nine questions raised were about U.S. Steel, according to the company. A total of 1,257 shareholders attended the meeting, almost double the previous year. Shareholders voiced concerns about how the company plans to fund its pledged investment in U.S. Steel and its ability to operate free of political interference, the Nikkei reported on Tuesday. Nippon Steel shares are down 13.9% year to date and 20.0% over the past year while the Nikkei 225 has traded about flat over those time periods.
Yahoo
2 days ago
- Business
- Yahoo
Nippon Steel Will Finally Get To Buy U.S. Steel. The Deal Likely Ensures More Federal Meddling in the Future.
The Trump administration is finally getting out of the way of Nippon Steel's acquisition of U.S. Steel—but in a way that seems to ensure more federal meddling in the future. It has been more than 17 months since U.S. Steel, a private company, struck a deal to be bought by Japan-based Nippon Steel for about $15 billion. Before the deal could be finalized, however, then-President Joe Biden swooped in to block the transaction, citing national security concerns that were never well defined. After an extensive review by the Biden administration found no reason to block the deal, Biden unilaterally decided to derail it anyway. During last year's campaign, President Donald Trump and Vice President J.D. Vance sided with Biden (and U.S. Steel's union) and opposed the deal. But Trump has abruptly changed course. On Friday, he announced "a planned partnership" between the two companies. In a statement posted to Truth Social, the president said the deal would "create at least 70,000 jobs, and add $14 Billion Dollars to the U.S. Economy." The details of the deal remain cloudy, but it seems like Nippon will invest $14 billion to take over U.S. Steel, with a few caveats. On Sunday, Trump told reporters that the deal is "an investment and it's a partial ownership, but it'll be controlled by the U.S.A," according to the Associated Press. On Tuesday morning, Sen. Dave McCormick (R–Pa.) told CNBC that the deal ensures an American CEO will continue to run U.S. Steel (presumably as a subsidiary to Nippon Steel) and that the federal government will get a "golden share" in the company. That would "essentially require U.S. government approval of a number of the board members. And that will allow the United States to ensure that production levels aren't cut," McCormick said. If true—none of this has been disclosed officially yet—then the federal government would effectively hold a majority stake in what remains of U.S. Steel after the Nippon acquisition is completed. In short, Trump would have converted Biden's meddling in the affairs of a private company into an official, permanent place for the federal government on the board of U.S. Steel—which is, I stress once again, a private company. So-called "golden shares" originated in Britain during the 1980s, when the British government used the arrangement to retain control over companies that were privatized, including several utilities and Rolls-Royce. More recently, they have been used by the Chinese government to exert direct control over supposedly private companies. It is not surprising to see the U.S. following in China's footsteps in that regard, but it sure is disheartening. While Trump appears to have made the right decision in standing aside and allowing this deal to go through, the inclusion of a "golden share" for the federal government would be a worrying precedent that is likely to chill future investment in American companies. There was nothing objectionable about the original U.S. Steel/Nippon Steel deal. It was always ridiculous for the federal government, under Trump and Biden, to suggest that Nippon Steel, a publicly traded company based in a close American ally that already operates several steelmaking facilities in the United States, is any sort of a national security threat. Biden's decision to unilaterally block the deal was a dangerous, disgraceful expansion of executive power that relied on a willingness to stretch the definition of national security beyond any reasonable point. Trump, unsurprisingly, has used that leverage to extend the federal government's control over decisions that should be left to executives and shareholders. All of this will make it easier for Trump (or the next president) to meddle in the future of U.S. Steel, or to apply the same terms to a future foreign investment in any business a future president decides to call a national security threat. Credit Nippon's negotiators for doing what needed to be done to land a deal that's in the best interests of shareholders and workers on both sides of the Pacific. But don't cheer the bipartisan effort to expand executive power in the marketplace. The post Nippon Steel Will Finally Get To Buy U.S. Steel. The Deal Likely Ensures More Federal Meddling in the Future. appeared first on Erreur lors de la récupération des données Connectez-vous pour accéder à votre portefeuille Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données Erreur lors de la récupération des données
Time of India
2 days ago
- Business
- Time of India
US Steel merger: Donald Trump to hold power over company's future via ‘golden share' in Nippon acquisition; deal valued at nearly $15 billion
File photo: US President Donald Trump (Picture credit: PTI) US President Donald Trump will directly control a special 'golden share' as part of the national security agreement that cleared the path for Japan's Nippon Steel to acquire US Steel, according to disclosures filed with the US Securities and Exchange Commission As per news agency AP, this unique arrangement allows Trump, or a designee named by him, to veto key decisions involving the American steelmaker, a power that shifts to the treasury and commerce departments only when another individual holds the presidency. The provision specifically names Trump and stipulates that 'at any time when Donald J Trump is serving as President of the United States of America, the written consent of Donald J Trump or President Trump's Designee' is required for certain decisions. The deal, valued at nearly $15 billion, was finalised last week, making US Steel a wholly owned subsidiary of Nippon Steel. It also includes significant commitments from Nippon, such as investing $11 billion to modernise US Steel's aging facilities. US Steel announced the merger completion in a joint statement with Nippon on June 13, adding that a golden share would be issued to the US government, as per news agency AFP. While the White House has clarified that the golden share is not exclusive to Trump but to the sitting president, filings indicate the language is specific to Trump's term in office, reported AP. The agreement grants Trump sweeping authority over decisions related to domestic steel production. This includes the ability to veto any changes to capital investment commitments, relocation of production or jobs outside the US, closure of plants, mergers with competitors, or even renaming the company or moving its headquarters from Pittsburgh. The national security agreement emerged after months of political backlash. Trump had initially opposed the deal during the 2024 campaign, aligning with labour unions and critics concerned about outsourcing and national interest. However, he later recast the transaction as a 'planned partnership' on social media, once Nippon agreed to stronger investment commitments and more government oversight. Despite efforts to portray it as a partnership, the deal marks a full acquisition. On June 13, US Steel delisted from the New York Stock Exchange following confirmation of the merger. While the full national security agreement has not been publicly released, filings and company statements outline its scope. The provision is seen as a way to ensure continued US oversight over strategic assets amid concerns about foreign control in key industries. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
