Trump wields “golden share” to halt U.S. Steel plant shutdown

Trump wields “golden share” to halt U.S. Steel plant shutdown, raising questions about government clout over private firms

Washington / Granite City, Ill. — The White House quietly invoked a little-used “golden share” authority this month to stop a planned wind-down at U.S. Steel’s Granite City Works plant in southwestern Illinois, according to reporting by the Wall Street Journal and subsequent confirmation from company and government spokespeople. The move — part of the terms approved when Japan’s Nippon Steel completed its acquisition of U.S. Steel in June — gives the U.S. government veto power over certain operational decisions affecting domestic production, and it has thrust a once-obscure corporate clause into the center of a broader debate over industrial policy, foreign investment and the limits of executive power. 

U.S. Steel announced on Friday that it had reversed a September decision to stop processing raw steel slabs at Granite City, saying it would continue supplying the plant “indefinitely.” The reversal came after the White House — through Commerce Secretary Howard Lutnick, according to people familiar with the matter — told the company it intended to exercise the government’s special authority that had been written into the sale agreement. Company and union statements said no immediate layoffs were planned and that the plant’s roughly 800 workers would continue to be paid under protections that run through 2027. 

The administration’s intervention was swift and decisive: Commerce officials contacted U.S. Steel executives and warned that the Golden Share provisions negotiated as part of the purchase would be used if the company tried to cease key operations. The Journal reported that the government’s action was intended to enforce commitments that formed part of the national-security understanding that cleared the $14.1 billion takeover earlier this year. Company spokespeople declined to provide granular details about the discussion but confirmed the company’s reversal in a short statement to employees and the press.

Union leaders and local politicians hailed the result as a victory for workers and regional manufacturing, while business and foreign-investment advocates warned that the move could chill cross-border deals and unsettle global investors. The United Steelworkers, which had organized opposition to aspects of the Nippon bid, said it welcomed the decision and said it had been preparing rallies and political pressure aimed at preserving Granite City’s role as a sheet-steel mill. At the same time, analysts cautioned that the episode highlights a tension between industrial policy designed to protect strategic capacity and the market certainty that prospective investors say they need.

What is the “golden share”?

The “golden share” in this case is not a conventional equity stake held on stock books but a contractual, government-granted set of rights embedded in the national-security agreement that accompanied the Nippon acquisition. Experts who examined the deal say the mechanism gives the president and Commerce Department officials a unilateral veto over certain major operational steps — such as plant closures, transfers of production out of the United States, or major changes to headquarters or board composition — that were viewed as sensitive to national security or economic resilience. The arrangement, aimed at preserving U.S. industrial capacity and jobs, was essential to winning political support for the foreign owner at a time of heightened concern over critical supply chains. 

Supporters of the administration’s move argue that it enforces promises Nippon Steel made to preserve U.S. production and that it protects domestic security and jobs. “If a foreign buyer wins regulatory approval after giving commitments to the American people, it is reasonable for the U.S. government to ensure those commitments are kept,” one administration ally told reporters. Proponents also point to the political difficulty of approving large foreign takeovers of strategic companies without tools that allow Washington to safeguard critical capabilities and investments. 

Critics call it a dangerous precedent

Critics, however, sounded alarm bells. Free-market and foreign-investment advocates contend that the golden-share authority, and its sudden use to block an otherwise commercial decision about plant operations, amounts to a significant expansion of government control over private business. Some legal scholars and investment analysts warned that the move risks deterring future foreign direct investment in U.S. industry because buyers will fear that the government can unilaterally override operational choices long after a transaction closes. Those experts say the uncertainty created by such unilateral powers may push multinational corporations to demand firmer legal protections or higher risk premia when investing in the United States. 

There is also a constitutional and political question about where the line is drawn between enforcing a negotiated national-security compact and exerting ad hoc political control over private industry. Civil-liberties and business groups say routine use of such emergency levers — or provisions that resemble them — could morph into a tool for industrial micromanagement, particularly if future administrations broaden the kinds of decisions that qualify as “national security.” Proponents of robust industrial policy counter that the unique strategic importance of steel and other heavy industries justifies an active government role. 

Market and diplomatic reverberations

Markets reacted to the unfolding coverage in fits and starts. U.S. Steel’s earlier June share moves had reflected investor relief when details of the golden-share agreement first emerged; the company’s share price gained on the June approval of the Nippon deal and again when the White House signaled it would enforce protections for U.S. plants. Analysts say the latest intervention will be parsed by investors as another sign that the U.S. government is willing to publicly exercise leverage in strategic sectors, a trend that accelerated this year with high-profile interventions in the semiconductor and critical-materials industries. That pattern, some observers warn, could complicate global corporate planning and bilateral investment ties. 

The diplomatic implications are nontrivial. Nippon Steel — a publicly traded Tokyo-based company that agreed to a U.S. package of investment commitments to secure the deal — has said it remains committed to its U.S. investments and pledged billions of dollars of capital spending across American mills. But Tokyo officials and other international investors will be watching closely to see whether the contractual protections embedded in the deal are administered predictably or become subject to shifting political calculations in Washington. That uncertainty could force foreign buyers to negotiate still more intrusive protections to win approval for future U.S. acquisitions. 

What happens next

In the short term, Granite City will keep processing slabs, and local leaders and union officials have temporarily scored a victory. But the intervention does not resolve longer-term questions facing the plant, the company and U.S. industrial policy more broadly: who decides what counts as a legitimate national-security concern, how binding and durable negotiated commitments to preserve jobs should be, and whether the government should have a permanent say in corporate operational decisions after approving an overseas buyer.

Legal challenges are possible if stakeholders seek judicial review of the government’s use of golden-share provisions, though much will depend on the language of the national-security agreement and the remedies sought. Congress could also consider whether such powers require clearer statutory limits or oversight; lawmakers on both sides of the aisle have in recent months raised concerns about balancing industrial resilience with market openness.

For now, the episode underlines how the intersection of geopolitics, industrial policy and private enterprise is reshaping the American economic landscape. What began as a corporate operational decision in a Midwestern mill has become a flashpoint in a broader debate over whether protective state tools — fashioned to safeguard critical capacity — will, in practice, preserve jobs and security or instead inject long-term uncertainty into a global investment climate that has so far helped underpin decades of cross-border capital flows.