Trump’s US Steel-Nippon Golden Share Complicates Labor Relations

The national security agreement between President Donald Trump, Nippon Steel Corp., and US Steel to merge the two companies opens the door to unprecedented control by the president over the steelmaker’s operations and its relations with the workers’ union.

The United Steelworkers said this week they remain in the dark about key components of the deal, which has been in the works since 2023. The companies announced the deal’s completion June 18, outlining the “golden share” agreement between them and Trump. The pact gives the president perpetual veto power over a broad range of actions impacting its workforce.

Under the terms, Trump would be able to stop Nippon from relocating US Steel, altering its planned billions in investments, or transferring jobs overseas. He will also be able to appoint one independent director.

Legal observers say USW, which represents about 11,000 US Steel employees, may not find solace in having the job security of their members directly in Trump’s hands.

“It raises a lot of questions,” said Thomas Lenz, a management-side partner at Atkinson, Andelson, Loya, Ruud & Romo. “I would be concerned that management may not be coming to the table with authority to reach a binding agreement because if the government can come along and veto it, those efforts at the bargaining table might be for naught.”

The ‘Golden Share’

Nippon can’t change US Steel’s name, delay $14 billion in monetary investments, and close or idle plants under most conditions without the permission of the president or his designee, according to a statement from the parties.

Commerce Secretary Howard Lutnick said in a June 14 post on X that the agreement also puts in place “other protections regarding employee salaries, anti-dumping pricing, raw materials and sourcing outside the U.S., acquisitions, and more.”

The deal stipulates that a majority of US Steel’s board and key management personnel will be US citizens. Nippon agreed to invest $11 billion by 2028 and $3 billion more after that for a new steel mill, according to a Bloomberg News report.

Despite the hefty investment promises, USW still opposes the terms. Leadership accused the Japanese steelmaker of seeking to transfer production away from union facilities in Pennsylvania to nonunion plants in Arkansas, and the golden share pact won’t prevent that, the union said in a statement June 15.

US Steel’s corporate structure and collective bargaining are key concerns for the union, said Alvin Velazquez, a labor and corporate law professor at Indiana University. USW’s CBA expires in September 2026.

“Who will the steelworkers ultimately be bargaining with?” Velazquez noted. “They could be symbolically bargaining with US Steel, but the real financial decision could be made in Japan.”

Trump’s involvement could further complicate the bargaining picture, even if he’s not directly participating in negotiations. Velazquez said the perpetual veto power could subject US Steel’s corporate strategy to the same policy oscillation that regulators suffer from between administrations.

“You’re dependent on who becomes elected for day-to-day decisions over your key employer,” he said. “Could they meddle in a collective bargaining agreement? Yes for sure.”

In a statement, the union said Trump has “assumed a startling degree of personal power over a corporation.”

“We will continue watching, holding Nippon to its commitments. And we will use the most powerful tool workers have against global corporations: collective bargaining,” the union said. “If our job security, pensions, retiree health care or other hard-earned benefits are threatened, we are ready to respond with the full strength and solidarity of our membership.”

US Steel workers haven’t gone on strike since the 1980s, but threatened to in 2018 before agreeing to a contract.

Legal Spats

Unions are afforded legal protections in mergers and acquisitions through successorship provisions in their contracts, said Ryan Vann, a partner at Cooley LLP. They can include requirements to bargain over the effects of a sale and buyer promises to recognize the union or remain neutral in future organizing drives.

“They’re looking at whether this acquiring company is going to be a good actor to their members and can afford to sustain the operations on the terms set forth in the collective bargaining agreement,” said Vann.

USW filed grievances against USS last year, accusing it of violating their successorship terms. An arbitration board held that Nippon satisfied its contractual duty to recognize USW as the employees’ representative and provided assurances that it has the financial resources to honor all agreements with the union.

US Steel also sued USW President David McCall in January, accusing him and Cleveland-Cliffs Steel Holding Corp. of illegally conspiring together to sabotage the deal and costing the company billions.

Labor’s Political Influence

USW’s opposition found a sympathetic ear in President Joe Biden, who blocked the deal after the Committee on Foreign Investment in the United States determined it would pose a national security risk.

Trump also initially opposed the takeover during his campaign, but opened the door to allowing it in February, before finally clearing it with the golden share agreement.

During negotiations, divisions between USW leadership and rank-and-file members also emerged. Nippon Steel Executive Vice President Takahiro Mori met with local union officials in Pittsburgh and afterwards, McCall told membership that Nippon wanted to “turn us against each other.”

It’s unclear what actions, if any, Trump might take with the union. He has acted with unprecedented speed and scope to strip unions representing federal workers of their power and fired several independent labor watchdogs, drawing dozens of lawsuits.

But he also appointed Lori Chavez-DeRemer, a pro-labor Republican congresswoman with ties to the Teamsters, as labor secretary and courted members of manufacturing unions across the nation on the campaign trail.

“This administration is maybe mindful that they can’t just ignore labor or leave labor in the cold,” Lenz said. “If things go smoothly, this could provide a template for how this administration wants to balance the return of these industries to the United States and do so with the support of labor.”