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Over the summer, Japan's Nippon Steel bought U.S. Steel with the approval of the U.S. government, even though President Trump had previously said he was opposed. Trump got a say in its operations in return. Planet Money's Erika Beras explains what Trump calls a golden share.
ERIKA BERAS, BYLINE: When a foreign company wants to buy or invest big money in an American company, they can't just go ahead and do it. Deals that might touch on national security - they're reviewed by the Committee on Foreign Investment in the United States, CFIUS. It's America's gatekeeper, making sure any foreign investor coming in is going to be on our side. And the vast majority of what CFIUS does is behind the scenes.
Did you have to, like, take an oath?
SARAH BAUERLE DANZMAN: I got a top-secret security clearance.
BERAS: Sarah Bauerle Danzman is a political economist at Indiana University. She did a stint as a Cipius case officer, so she's had a firsthand look at the national security agreements that CFIUS negotiates. Historically, they've been related to defense. But under both the Trump and Biden administrations, the committee has been reviewing a broader category of business transactions - cybersecurity, AI, biotechnology, clean energy - and now this U.S. Steel deal. On the day it was signed, a White House spokesperson said it will safeguard U.S. national and economic security. The deal stipulates all kinds of things. Nippon cannot change U.S. Steel's name. Nippon must invest billions of dollars updating mills. No factory can close, no salaries reduced without President Trump's approval. And the agreement actually includes his name.
BAUERLE DANZMAN: That's not normal. In any other situation, the whole thing about, like, getting Donald J Trump's express consent would not be there.
BERAS: President Trump used an unusual term to describe this unusual arrangement.
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PRESIDENT DONALD TRUMP: We have a golden stock. We have a golden share which I control or president controls.
BERAS: Is a golden share a new thing?
BAUERLE DANZMAN: No. It's a new thing for the U.S.
BERAS: Imagine a company has, like, a hundred shares. Usually, the more shares you have, the more power you have. But some shares have extra powers.
BAUERLE DANZMAN: A golden share is a different class of shares in which a government can own a very small percentage of the company but has outsized voting rights.
BERAS: So they are, like, a super-special shareholder.
BAUERLE DANZMAN: Yes.
BERAS: The idea comes from the U.K. in the 1980s. The U.K. privatized state-owned industries and used golden shares as a way to ease into a freer market. Since then, others have also used golden shares - China, Russia, Brazil. But what Trump is doing with U.S. Steel? It's an unusual take.
BAUERLE DANZMAN: It doesn't appear to be a golden share...
BERAS: At least not a typical one.
BAUERLE DANZMAN: ...Because the U.S. government does not appear to actually hold an equity stake in U.S. Steel.
BERAS: What does that mean?
BAUERLE DANZMAN: It means that what the U.S. government has is kind of extra-special governance rights.
BERAS: Sarah says it's a symbolic golden share. And when we asked the White House why they call it a golden share, they said "The Golden National Security Agreement Outlining Certain Provisions And Stipulations Governing Nippon Steel's Acquisition Of U.S. Steel" didn't really have the same ring to it. Nor did, quote, "metallic-gray share." Either way, it's the U.S. government getting a big say in the C-suite.
I'm Erika Beras, NPR News.
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