The President's Golden Share in U.S. Steel

Summary

Planet Money: The President's Golden Share in U.S. Steel – Detailed Summary

Release Date: July 25, 2025

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Introduction

In the July 25, 2025 episode of Planet Money, NPR delves into the controversial and unprecedented sale of U.S. Steel to Nippon Steel, a Japanese company. Hosted by Erica Barris and Sally Helm, the episode explores the intricate interplay between foreign investment, national security, and government intervention in the American steel industry.

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Background: The Sale of U.S. Steel

The episode begins by highlighting the decline of the American steel industry. Erica Barris introduces listeners to the challenges faced by U.S. Steel, noting that while once a powerhouse employing thousands, the industry now sustains only a fraction of its former workforce. A pivotal moment occurred when U.S. Steel announced its intention to sell to Nippon Steel, a move that was met with widespread concern, especially given Pennsylvania's status as a swing state during the election cycle.

Notable Quote:

"The American steel industry is not what it used to be. There were once dozens of steel plants employing many thousands of people. Now they employ just a few thousand." – Sally Helm (01:18)

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Government Intervention and CFIUS

As the sale was announced, bipartisan political figures expressed alarm over the potential foreign ownership of a critical American industry. Initially, President Biden intervened, blocking the sale on the grounds of national security. However, the Trump administration later reversed this decision, approving the sale with a stringent set of conditions aimed at safeguarding American interests.

Central to this intervention is the Committee on Foreign Investment in the United States (CFIUS), an interagency body responsible for reviewing and approving foreign investments in U.S. companies to ensure they do not pose national security risks. Erica Barris explains the expanded role of CFIUS under both the Trump and Biden administrations, emphasizing its broader definition of national security to include economic factors such as cybersecurity, AI, and clean energy.

Notable Quote:

"CFIUS was created to make sure those companies and people don't mess with US Interests." – Sarah Bowerly Dansman (07:04)

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The Deal's Terms: Introducing the Golden Share

The crux of the episode revolves around the unique conditions imposed on Nippon Steel's acquisition of U.S. Steel. Dubbed a "golden share" by President Trump, this arrangement grants the U.S. government significant governance rights without actual equity ownership. This departure from traditional golden share models raises questions about its implications and uniqueness.

Notable Quote:

"We have a golden stock. We have a golden share, which I control or president controls." – Donald Trump (12:40)

Despite the nomenclature, experts clarify that the U.S. government does not hold an actual equity stake in U.S. Steel. Instead, it possesses special governance rights that allow for veto power over critical decisions, such as relocating headquarters or altering investment plans.

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Understanding the Golden Share

The concept of a golden share isn't novel globally. Originating in the UK during the Thatcher era, golden shares allowed governments to retain control over privatized industries deemed vital for national interests. Countries like Russia, China, and Brazil have adopted similar mechanisms to balance free-market operations with state oversight.

Notable Quote:

"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." – Unnamed Expert (14:10)

However, the U.S. arrangement stands out as it doesn't involve actual share ownership but mimics the control typically associated with golden shares through contractual agreements.

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Unique Aspects of the U.S. Deal

The U.S. government's approach in this deal deviates from traditional golden share implementations. Instead of holding a minority stake, the government exercises control through a National Security Agreement, granting veto power over significant corporate decisions directly to the President.

Notable Quote:

"The golden National Security Agreement outlining certain provisions and stipulations governing Nippon Steel's acquisition of US Steel didn't really have the same ring to it." – White House Representative (17:33)

This unprecedented move has sparked debates among economists and policymakers about the balance between protecting national interests and maintaining a free-market economy.

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Implications and Reactions

The episode discusses the potential repercussions of such government intervention. While the deal ensures the survival of U.S. Steel and preserves jobs, it may deter future foreign investments due to increased regulatory oversight and reduced autonomy for acquired companies. Economists express concerns that this could slow down the growth of the manufacturing sector and hinder the attractiveness of the U.S. market for international investors.

Notable Quote:

"Buying US Companies is probably going to be seen as a less lucrative or have less of an upside." – Sarah Bowerly Dansman (25:10)

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Comparisons to Previous Government Interventions

Drawing parallels to the 2008 financial crisis bailout of General Motors, where the government took an active role to steer the company back to profitability, the episode highlights the fine line between support and control. While GM received substantial government funds to prevent bankruptcy, the U.S. government's role in the U.S. Steel deal represents a more permanent and direct form of influence without ownership.

Notable Quote:

"The closest thing we have to our government owning a company is Amtrak. The US Government is a majority shareholder, so not a small shareholder with Special powers like a golden share." – Sally Helm (21:27)

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Conclusion: Balancing Act Between Security and Market Freedom

Planet Money concludes by pondering the future of foreign investments in the U.S. steel industry and beyond. The unique "golden share" arrangement sets a precedent that could reshape how the U.S. balances national security with economic freedom. While it ensures the preservation of key industries and jobs, it raises essential questions about the long-term implications for market dynamics and international investor confidence.

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Production Credits

This episode was produced by Willa Rubin, edited by Marianne McCune, with research assistance from Emily Crawford and Emma Peaslee. Fact-checking was handled by Cierra Juarez, engineering by Robert Rodriguez, and Japanese translation by Yuki Noguchi. Executive production was led by Alex Goldmark.

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For those interested in exploring more about the intersection of economics and daily life, consider subscribing to Planet Money+ for exclusive content and early access to new episodes.

Transcript

[Alex]

Hey, Alex, here. Do you live in the New York area? If so, come see planet money live August 18th at the Bell House in Brooklyn. There'll be a bunch of us there from Planet Money and the Indicator. And if you buy early access tickets, you can hang out with us before the show. We're putting together a blend of storytelling guests and a tribute to unsung economic heroes. Alexei might be in costume. It's going to be a mix of different things designed to be a celebration, a fun night out that is also about economics and asks big questions like what should the government do to make us all richer and life more affordable? This is a taping for part of the finale for Summer School and we'll crown a valedictorian. There'll be a quiz and trivia segment that you can be a part of so you might end up on the podcast. Buy your [e-mail] PlanetMoneyLive. That's NPR.org PlanetMoneyLive. You can do it right now on your phone. Here's the show.

[Erica Barris]

This is Planet Money from npr. I live in Pittsburgh Steel City. And for more than a year I've been inundated by ads from the company U.S. steel like this one.

[Unnamed Steelworker]

Welcome to Irvin Works, just one of three U.S. steel plants here in the Mon Valley. I'm fourth generation steel and I'd like it to remain here.

[Sally Helm]

The American steel industry is not what it used to be. There were once dozens of steel plants employing many thousands of people. Now they employ just a few thousand.

[Erica Barris]

And a year and a half ago, the company announced it was going to be sold and not to an American company, to a foreign company, a Japanese company.

[Sally Helm]

And U.S. steel said, this is a great thing for us, a lifeline. Otherwise we will have to shut mills down.

[Erica Barris]

So these ads are full of hard hat wearing steelworkers trying to convince viewers that this sale was the right thing.

[Unnamed Steelworker]

Towns like ours, restaurants like this one.

[Donald Trump]

All depend on the plant running.

[Erica Barris]

Let's get it done.

[Sarah Bowerly Dansman]

U.S. steel and Nissan Steel, the future of American steel.

[Sally Helm]

So the company really wanted this deal, but when it was announced to the public, it was right in the middle of the election cycle. Pennsylvania is a swing state, very purple. Yeah. And U.S. steel is this storied American company and just about every big name politician on both sides of the aisle freaked out.

[Donald Trump]

I will stop Japan from buying United States Steel.

[Erica Barris]

U.S. steel should remain American, own owned.

[Unnamed Expert]

An American operated by American union steelworkers.

[Donald Trump]

The best in the world.

[Sally Helm]

In fact, before leaving office, President Biden blocked the sale, said it threatened U.S. national security.

[Erica Barris]

But just recently, in a dramatic twist.

[Donald Trump]

We'Re here today to celebrate a blockbuster.

[Erica Barris]

Agreement that will Trump completely reversed course. He approved the sale of U.S. steel to Nippon Steel.

[Donald Trump]

We're going to have a great partner. We're going to have a great partner. And I have to tell you, Japan has been a tremendous friend of mine during my years as president. And then we have.

[Sally Helm]

So the company was sold, but with one big caveat. Even though US Steel is now owned by a Japanese company, the United States government will be very involved in managing it.

[Erica Barris]

Yeah, the American government has its hands all up in this deal. The US Government can appoint a member to the company's board. No factory can close, and workers pay can't be reduced without President Trump's approval. And Nippon cannot change U.S. steel's name. And Nippon has to invest billions of dollars updating mills and building a new.

[Sally Helm]

One, which kind of sounds like foreign ownership, but with handcuffs.

[Erica Barris]

The question is, is this a new way to secure foreign investment while also protecting American interests, or is this unprecedented government overreach? Hello and welcome to Planet Money. I'm Erica Barris.

[Sally Helm]

And I'm Sally Helm. How did this deal happen and why?

[Erica Barris]

Today on the show, an attempt to protect U.S. manufacturing jobs through foreign money and government meddling. The U.S. steel Nippon deal, President Trump is calling it a golden share. Is it the first of its kind?

[Sally Helm]

And is this step to protect government interests a step away from the free market?

[Unnamed Sponsor]

This message comes from NPR sponsor Holiday Inn by ihg. It's a new day for a new stay at Holiday Inn for business travelers. With modern spaces for meeting and working, plus delicious dining. From breakfast to happy hour and dinner, you have everything you need to get work done. Give your everyday business travel an upgrade. Book your next business trip at Holiday Inn by IHG. Visit holidayin.com to book your stay.

[Sally Helm]

When it comes to foreign investment in the United States, we all know about the invisible hand of the market. But there are also the invisible hands of the government. The US Government is actually quite involved in defining the shape of big international business deals. And it's useful to understand the mechanics of that, like the mechanisms of control.

[Erica Barris]

When a foreign company wants to buy an American company or invest big money, they can't just, like, go ahead and do the deal. There is an entire vetting system designed to determine if a foreign investor will be a good fit for our country. And part of the vetting is going before this agency that, despite how important it is, is not a household name. It's called CFIUS that is not Sisyphus.

[Sarah Bowerly Dansman]

Sisyphus, of course, would be a mythological man who is even now pushing a boulder up a hill. He can't stop.

[Sally Helm]

No, this is S cfius, the Committee on Foreign Investment in the United States.

[Sarah Bowerly Dansman]

It is like America's gatekeeper when it.

[Sally Helm]

Comes to foreign investment around things that involve national security. And the vast majority of what they do is top secret.

[Erica Barris]

Did you have to, like, take an oath?

[Unnamed Expert]

I got a top secret security clearance.

[Erica Barris]

Sarah Bowerly Dansman is a political economist who did a stint at the State Department as a CFIUS case officer.

[Unnamed Expert]

And I got, like, an extra layer of security clearance above that so that I was able to go into what's called a scif, which is a place that has, like, extra layers of protection so that you can talk about things that are classified at the top secret level.

[Erica Barris]

CFIUS is this interagency committee. Its members come from Treasury, Homeland Security, Commerce, Energy, Defense, Trade, and folks from the White House. And their whole purpose is to protect the security of the United States by scrutinizing any foreign players trying to buy American companies or to invest in the country.

[Sally Helm]

Foreign companies and people invest more than $5 trillion a year in U.S. companies.

[Sarah Bowerly Dansman]

And CFIUS was created to make sure those companies and people don't mess with US Interests. Like, if you're going to come here, you got to be on our side.

[Erica Barris]

They strike deals with companies to make sure of that. National security agreements. And historically, those deals have had to do with defense.

[Unnamed Expert]

They have all been companies that are integrated into the defense industrial base or providing important kind of critical infrastructure services.

[Sally Helm]

So the US Will look at companies and tell them, okay, you can operate in the US but here are some rules. You can't share certain key technologies, or you might be required to fill orders from the US government. Like, CFIUS required the Japanese company SoftBank to agree to a bunch of rules when it acquired the cell phone company Sprint.

[Erica Barris]

Or in more extreme cases, the US Government will just say, sorry, you can't buy this American company. Like, in 2016, President Obama blocked the sale of a company that makes parts for semiconductors to a Chinese control business. The following year, President Trump blocked the sale of an American semiconductor company to Chinese investors.

[Sally Helm]

And starting with the first Trump administration, the US has used CFIUS more often and more aggressively, expanding the definition of national security.

[Erica Barris]

And in fact, during Biden's administration, he doubled down on Trump's broader definition of national security. He officially expanded the category of industries that CFIUS should review. So today, national security includes things like cybersecurity AI, biotechnology, biomanufacturing, clean energy.

[Unnamed Expert]

The US Government is increasingly determining that a larger and larger set of industries and companies have national security relevance.

[Sarah Bowerly Dansman]

And now this U.S. steel deal. And look, yes, steel is important for some military purposes, but much of the rhetoric around this deal was about a different kind of security.

[Unnamed Expert]

US Steel is not producing steel in any kind of major or important way for the Department of Defense.

[Erica Barris]

What's the rationale?

[Unnamed Expert]

What I would say is that there has been this general idea that having the capacity for the US to produce steel is important for being able to be self reliant, particularly in a time of war.

[Erica Barris]

The idea is steel production is part of military readiness. So this deal might be about national security, but it also seems to be about job security, protecting American manufacturing, American jobs. On the day the deal was signed, a White House spokesperson said it will help safeguard US national and economic security. And the Commerce Secretary posted about it.

[Sally Helm]

Yeah, it's like the government is thinking.

[Sarah Bowerly Dansman]

Of national security not through the battlefield, but through, through the factory floor economic security.

[Erica Barris]

Of course, CFIUS does all this vetting, figuring out whether a company or investor is the right fit for the USA behind the scenes. They don't disclose what they're discussing, what confidential security information the different agencies are.

[Sally Helm]

Sharing and what happens after. All that vetting is also secret. That is the part where when necessary, foreign investors and the US Government agree to some terms. And in something called a national security.

[Unnamed Expert]

Agreement, most of the time no one hears anything about it. CFIUS is not allowed to release information about this.

[Erica Barris]

What happens if someone does? Like, do you get in trouble?

[Unnamed Expert]

Yeah, it's a criminal offense. So it's not just that you could be fined, but you could be thrown into prison. So people take it very seriously.

[Sally Helm]

But in this US Steel acquisition, we learned a lot more than we usually get to.

[Erica Barris]

The US Government did disclose it to the public like it was on all the social media platforms, like everyone's been talking about it.

[Unnamed Expert]

I mean, the rules are different under Trump.

[Donald Trump]

Steele is doing great now because of what we did.

[Erica Barris]

Trump talked about it. Commerce Secretary Howard Lutnick posted details. Pennsylvania Senator Dave McCormick did interviews about it. I think this is great for, great for our security, great for our national.

[Sally Helm]

Security, economic security, maybe because after months.

[Sarah Bowerly Dansman]

Of swearing to stop this deal from going through, they needed to explain to the public why they were instead clearing the path for it.

[Donald Trump]

Now we're really doing great. Big. A big investment's being made in Pennsylvania. You've been reading about it.

[Erica Barris]

The CEO of Nippon Steel was Quoted in the press about the unusual control his company conceded. But he said they'll retain sufficient managerial freedom. Biden.

[Sally Helm]

At a press conference, he said Biden's rejection of the deal was unreasonable. And now Trump has made the right decision.

[Erica Barris]

The White House said the deal has, quote, powerful terms that directly benefit and protect America. Some of the stipulations, Nippon will not be allowed to move US Steel's headquarters away from Pittsburgh without permission from the president. It cannot reduce or delay its billions of dollars of investment, move jobs out of the US Close steel plants over the next decade, even reduce salaries.

[Sarah Bowerly Dansman]

And Trump used an unusual term to describe the new arrangement.

[Donald Trump]

And we have a golden stock. We have a golden share, which I control or president controls.

[Erica Barris]

A golden share. What on earth is that? That's after the break. When I first heard of the sale of U.S. steel to Nippon Steel and the U.S. having a golden share, I was like, what? Because golden share in Trump sounds very on brand for Trump. Like the golden Visa, golden phone, a fragrance that comes with a gold statue of him. Is a golden share a new thing?

[Unnamed Expert]

No, it's a new thing for the.

[Sarah Bowerly Dansman]

U.S. this is Sarah Bowerly Dansman again, professor at Indiana University.

[Sally Helm]

She has also written about golden shares.

[Unnamed Expert]

I learned about the golden share that was supposedly part of the Nippon Steel arrangement when someone sent me a text and said, what does this mean?

[Erica Barris]

Was it me?

[Unnamed Expert]

It was not you, Erica.

[Erica Barris]

Before I tell you what a golden share is, let's just remember what a share even is. Imagine a company has like 100 shares. In most situations, the more shares a shareholder has, the more voting rights and power they have in that company. And some shares have extra powers.

[Unnamed Expert]

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.

[Erica Barris]

So essentially the government is a shareholder, but they are like a super special shareholder.

[Unnamed Expert]

Yes.

[Sally Helm]

The idea of golden shares comes from the UK. In the 1980s, the UK was going through this period of industrial decline. Its economy was struggling. The same stagflation that had plagued the US in the late 70s was happening there. And the UK needed a way to revitalize its economy.

[Unnamed Expert]

So remember the Thatcher revolution, the Iron Lady? Yes. So Margaret Thatcher and Ronald Reagan are BFFs. They're very focused on the idea of privatizing industry, privatization.

[Erica Barris]

That was Thatcher's idea of how to get the UK growing again because there were all these industries that were state owned, like their telecommunications, aerospace, energy and Rolls Royce.

[Unnamed Expert]

Yes. Rolls Royce has cars, but also has these really important fancy aeronautical engines and parts and so forth.

[Erica Barris]

Rolls Royce also has nuclear reactors and submarines, which the British Navy uses to.

[Sally Helm]

Get the economy rolling. Thatcher decided to turn these nationalized industries into private companies, but she didn't want.

[Sarah Bowerly Dansman]

To totally give over control, because what if the new owners botched everything and suddenly the British no longer had a functioning telephone system or Rolls Royce sold itself and now another country had that British Navy intel.

[Erica Barris]

So she decided on this idea called golden share, a way to ease into a freer market economy. The government would own some small percentage of shares in the companies, but the shares would be special. They would give the British government more say.

[Sally Helm]

Since then, other countries have also used golden shares to ease into free market economies while trying to protect industries that they see as national champions. Russia has held golden shares in mining, engineering and transportation. China in some of its tech companies. And in the mid-90s, Brazil kept a golden share of its aircraft manufacturing company.

[Erica Barris]

Still today, Brazil's government has a say in everything from who it will appoint to the board to whether the company can change its logo. But what Trump is doing with the US deal, it's an unusual take on golden shares. The US Government will be like a powerful shareholder, but without having any kinds of shares at all.

[Unnamed Expert]

It doesn't appear to be a golden.

[Sarah Bowerly Dansman]

Share, at least not a typical one.

[Unnamed Expert]

She says, because the US Government does not appear to actually hold an equity stake in US Steel.

[Erica Barris]

What does that mean?

[Unnamed Expert]

It means that the US Government, and therefore the US Taxpayers, are not shareholders in US Steel. They can't benefit economically. Instead, what the US Government has is kind of extra special governance rights.

[Erica Barris]

If it's not a golden share, then why would it have that name?

[Unnamed Expert]

Because it sounds cool.

[Erica Barris]

Sarah did more research after we spoke, and where she landed it's a symbolic golden share. When we asked the White House why they called it a golden share, they said something very funny. They said, quote, the golden National Security Agreement outlining certain provisions and stipulations governing Nippon Steel's acquisition of US Steel didn't really have the same ring to it, end quote.

[Sally Helm]

Wait, that's really what they said?

[Erica Barris]

That's really what they said. And then when I asked why gold was in its name at all, they said, quote, because metallic gray share didn't have the same ring to it either, end quote. But US Steel did reveal more information about the agreement in a recent filing with the securities and Exchange Commission. So Sarah and I both read that document, and that's where you see what the president's new role in the company will be. Walk me through this because it's not written in, like, plain speak.

[Unnamed Expert]

Yeah, let me pull it up so that I can.

[Sarah Bowerly Dansman]

In the filing, there's some pretty typical stuff.

[Sally Helm]

Name, address, how many shares. Some Latin, but it gets more advanced. It specifies how soon a specific ailing steel mill could be closed. Not before 2027. And more unusual, the US president's name is listed.

[Erica Barris]

You're saying it's weird. This is not typical.

[Unnamed Expert]

It is a novel arrangement.

[Erica Barris]

The filing says the company can't move U.S. steel out of Pennsylvania. They can't acquire any competitors of U.S. steel. It disqualifies the participation of three specific people who tried to scuttle the sale.

[Sarah Bowerly Dansman]

Also, the US President himself has veto power over any big decisions at any.

[Unnamed Expert]

Time when Donald J. Trump is serving as President of the United States of America. The written consent of Donald J. Trump.

[Erica Barris]

That's the thing that Sarah found most surprising, that Donald J. Trump's name is included.

[Unnamed Expert]

There's a list that we're going to get to that are all of the things that the company cannot do without written consent from President Trump or when he's no longer president, the CFIUS monitoring agency.

[Erica Barris]

I see that.

[Unnamed Expert]

Yeah, that's super weird. It's so weird. It's like the weirdest thing that's not normal in any other situation. The whole thing about, like, getting Donald J. Trump's express consent would not be there. It's bonkers. It's like the most bananas thing.

[Erica Barris]

So what does all this US Government control over the new Japanese owned company mean?

[Sarah Bowerly Dansman]

In the golden share deals that we've talked about in other parts of the world, like the UK or Brazil, those were governments that were moving towards free market economies. They were privatizing industries, but using golden shares to keep some control over them. This golden share move with U.S. steel, it's more like a step away from the free market.

[Unnamed Expert]

What he has done is kind of muddy the waters between a private company that's publicly traded versus a state owned enterprise. Because the US Government now has substantial influence over the operations of US Steel, but it doesn't own US Steel.

[Erica Barris]

How is that different from nationalizing a company?

[Unnamed Expert]

So I think there are three ways that we can think about this.

[Erica Barris]

To put this move in perspective, Sarah walked me through some of the other ways our government has asserted control over important industries. In some cases, the government has straight up owned industries, critical infrastructure like utilities.

[Sally Helm]

Today, the closest thing we have to our government owning a company is Amtrak. The US Government is a majority shareholder, so not a small shareholder with Special powers like a golden share. The US government owns more than 51% and the US government also helps prop it up.

[Unnamed Expert]

So if the company is operating in the red, the government will just give them the money.

[Erica Barris]

Oh, nice. That's great for them.

[Unnamed Expert]

Exactly right? Yeah. And so they're not as beholden to market forces because they can make it up.

[Erica Barris]

Another version of the US Government playing an active role in companies was during the financial crisis that hit in 2008. The economy tanked and the government didn't want crucial companies like General Motors to fail. So it put around $50 billion into GM and got involved.

[Unnamed Steelworker]

Let me be clear. The United States government has no interest in running gm.

[Sarah Bowerly Dansman]

That was President Obama explaining the strategy to the American people.

[Unnamed Steelworker]

What we are interested in is giving GM an opportunity to finally make those much needed changes that will let them emerge from this crisis a stronger and more competitive company.

[Erica Barris]

GM couldn't trade stocks and the US Government was involved in key management decisions. General Motors got the nickname Government Motors.

[Sarah Bowerly Dansman]

After a few years.

[Sally Helm]

The government divested itself of its hundreds of millions of shares of General Motors. So that was almost like a 10 temporary nationalization. And now we have this new version of government interference, this U.S. steel deal that Trump is calling a golden share.

[Unnamed Expert]

Which is about the government having influence over the company without having an ownership stake in it. It's about state influence.

[Erica Barris]

And that influence is really through that national security agreement we told you about. Through cfius, the committee that oversees foreign investment, the US Is using its influence to help keep US Steel alive and in service of the country while allowing a Japanese company to own it and using its latest expanded definition of national security that includes economic security in the process.

[Sally Helm]

And that could be a good thing. The government gets what it wants and Nippon Steel gets to expand their company their global footprint. But economists don't love the idea of governments running industries, even in small ways.

[Sarah Bowerly Dansman]

One reason other investors don't want governments having disproportionate influence like designating different kinds of shareholders could feel unfair. Because if you're not in the golden share category, you might be like, I'm a second class shareholder. Maybe you don't want to invest at all. That's not great for markets like Brazil's.

[Erica Barris]

Big say in what happens to the country's prized aircraft company, Embraer. It might prevent regular shareholders from making the maximum profit.

[Unnamed Expert]

The Brazilian government is going to say that's a price we're willing to pay. Right? Like it's amazing that we as a middle income economy can compete with the likes of Boeing and Airbus. So they're not going to give that up. Right. They don't mind if it costs them.

[Sally Helm]

Some money, but the other shareholders might mind.

[Sarah Bowerly Dansman]

Basically, there are trade offs, and any government that is using any of these tools to keep their fingers in private companies has to deal with them.

[Erica Barris]

So if the US Government is using golden shares or just using CFIUS agreements more extensively to meddle in how international investors can run companies, Sarah says there are going to be consequences.

[Sarah Bowerly Dansman]

And if this deal with Nippon Steel is any indication of how the US Government is going to handle foreign ownership moving forward, Sarah worries it could give foreign investors pause.

[Unnamed Expert]

Buying US Companies is probably going to be seen as a less lucrative or have less of an upside.

[Sarah Bowerly Dansman]

Foreign investors play a big role in the kind of US Manufacturing that Trump is trying to encourage. Sarah lives in Indiana, and she says a lot of the plants in her state are doing well because of foreign investment. If owning those plants in the future will mean handing over controls to the.

[Unnamed Expert]

US Government, they might be less willing to do so. And that could mean that the manufacturing sector grows more slowly. The companies that decide to take these deals, they're exposing themselves to quite a bit of risk because they're going to allow the government to make pretty substantial decisions about capital allocation. That means that those decisions are no longer going to be determined by market conditions, but instead will be determined by political conditions.

[Erica Barris]

It is hard to know what CFIUS has been doing and will do because this US Steel agreement is the rare case of anyone talking about any of that. What we do know is that there's been a huge expansion of the business transactions CFIUS reviews under Trump and under Biden. And increasingly, the government has used that looser definition of national security.

[Sally Helm]

Still, only a small fraction of the reviews actually result in a binding national security agreement. But those can last years and years. So the total number of companies following orders from the US Government keeps piling up.

[Erica Barris]

One more thing I know is this US Steel deal is good for for a small group of my neighbors, the few hundred steelworkers whose mill is about 12 miles from my home. Because the CFIUS agreement says that mill cannot close for the next 10 years. On our next episode, it's Planet Money Summer School. We'll look at one way the government can encourage innovation. The protection of intellectual actual property. And we've got a meaty case study to discuss whether you should be able to patent a cut of steak. A quick reminder that Planet Money plus supporters get early access to new episodes of Summer School. So if you haven't signed up yet. Now's a great time to join. You Also get sponsor free listening and help keep our work going. Just go to plus.NPR.org planet money. You can find a link in our show notes.

[Sally Helm]

This episode was produced by Willa Rubin and edited by Marianne McCune. Research help from Emily Crawford and Emma Peaslee.

[Sarah Bowerly Dansman]

It was fact checked by Cierra Juarez.

[Sally Helm]

And engineered by Robert Rodriguez. Japanese translation help from Yuki Noguchi. Alex Goldmark is our executive producer.

[Erica Barris]

Thank you to Jim Secreto and Florian Merslein, America Barras.

[Sally Helm]

And I'm Sally Helm. This is npr.

[Sarah Bowerly Dansman]

Thanks for listening.