His “golden share” in US steel will turn Trump into a more common mechanism elsewhere in the world

However, while this practice is largely unprecedented in the US, “golden share” has emerged in other economies as a way to ensure government surveillance or control.

Trump issued it on June 13th Presidential Order Since the contract was first announced in 2023, it has cleared the acquisition of US steel by Nippon Steel. Previous Biden administration And the Trump administration had raised concerns about foreign investment and ownership of major US industries.

To alleviate these concerns, the order announced that both Nippon Steel and US Steel have agreed to a national security agreement that will permanently “golden sharing” to the newly acquired company.

In an interview with CNBC in late May, US Sen. Dave McCormick (R-Penn.) said that US steel, owned by Nippon Steel, would do it. I have it “US CEOs (and US majority boards)And the government must approve major structural changes in the company, such as production levels and factory locations.

Japanese Steel on wednesday He confirmed it had granted the US a “golden share” and said it had granted its authority to Washington to block production and employment that has been relocated outside the US.

Golden share is “Total controlJust as Trump promoted reporters last week. However, it gives holders the ability to outweigh all other shareholders in certain circumstances, whether in government or other organizations.

Where is Golden Share used?

In an interview in May, McCormick said that the Nippon Steel Control structure was “Slightly unique. “The US government has historically not addressed ownership of private companies outside of the moment of the financial crisis. 2008when Washington gained dominant share of major auto companies as part of an emergency bailout.

However, this practice is more common outside the US

The term “golden share” first appeared in the 1980s, when Thatcher’s administration launched a campaign to privatize many of its state-owned enterprises. Share is intended to be a compromise solution, allowing the UK government to continue to say what these are doing A newly privatized company was running.

As privatization bugs spread across mainland Europe, many European governments adopted special governance rights to maintain national influence in previously nationalized enterprises.

However, the European Court of Justice defeated some of these arrangements in the early 2000s, finding that Golden Share constituted an unfair “.Limitations on the free movement of capitalviolates the following: Maastricht TreatyEuropean Union founding document.

2003, UK ordered It abandons its golden share at the UK Airport Authority. Spain has waived its governance rights than various companies in communications, banking and tobacco. And in 2007, Germany sold its Golden Share at Volkswagen.

Still, the UK holds golden stakes in it Defense Sectornamely the Rolls-Royce, the BAE system, and two Babcock Dockyards. And Westminster may have considered practicing once Again, I recently gained a golden share In Royal Mail It was completed in April this year as a condition for sales to the Czech EP Group.

China embraced something similar to “golden share” in the early 2010s, and conducted state surveillance of the country’s emerging technology sector. The so-called special managed shares were granted to state-backed entity authorities for key decisions without requiring full state ownership (common in several other sectors of the Chinese economy, such as the media).

It is in the Chinese government I took a small stake With companies like Sina Weibo, which offers microblog services like X, and live streaming platform Kuaishou. That too It is reportedly We photographed small piles from units from China’s high-tech giants, including e-commerce giant Alibaba, game publisher Tencent and Tiktok Parent Bytedance.

Russia also welcomed the golden share. This happened again during the domestic privatization drive. In 2019, Yandex, Russia’s most popular search engine, recognized “golden share” as “.Public Interest Foundation“Other than observers, they are considered representatives of government oversight. The Foundation has the authority to temporarily replace Yandex management.

How about the US?

McCormick, interview in late May I proposed that Nippon Steel’s arrangement “can be a model of transactions that really affect national security.”

Industrial policy is becoming a bipartisan issue in the US, with both Democrats and Republicans supporting measures to protect US manufacturing (even if the best policies to achieve that are different). Both sides of the political disparity criticized Nippon Steel’s original bid for steel as a threat to national security.

Other economists suggest that golden share could be a way to maintain oversight of sectors that pose systemic risk to the US economy. In 2023, amid concerns that issues in Silicon Valley Bank could spiral into a wider financial crisis, Saule Omarova, a candidate for senior Treasury position, suggested that the US government is systematically considering the golden share of important banks.

“It would be structured to serve a single purpose, to pose the American public at risk we may have to endure in the end, in order to decide how the banks manage, or perhaps not to manage,” she suggested. With opinion for New York Times.

The new owners of US Steel aren’t too worried about how Washington’s special forces will affect their business. “We have sufficient management freedom,” says Eiji Hashimoto of Nippon Steel. I told the reporter On Thursday, he added that “golden share” was his company’s idea. “We are not limited to pursuing anything.”

Nippon Steel’s stock has fallen by about 8% over the past week.