The U.S. government is planning to participate in the planned “partnership” between U.S. Steel and its Japanese rival Nippon Steel, Sen. Dave McCormick, R-Pa., said on CNBC on Tuesday.

McCormick said that as part of a national security agreement that the companies will sign with the Trump administration, the federal government will get a so-called golden share in the deal. As a result, the administration will have a say in who is appointed to the company’s board from the United States.

On Friday, President Donald Trump said that he was favoring a $14 billion “investment” by the Japanese giant in U.S. Steel, without disclosing any ownership details. The president had previously said he opposed Nippon Steel’s outright acquisition of the American manufacturer. U.S. Steel is headquartered in Pennsylvania, a politically important swing state that Trump in 2024.

Following his statement Friday, Trump on Sunday told reporters that U.S. Steel will be “controlled by the United States, otherwise I wouldn’t make the deal” and that “it’s an investment and it’s a partial ownership, but it’ll be controlled by the U.S.A.”

McCormick described the “golden share” as a U.S. government veto power and suggested that the idea was Nippon Steel’s proposal.

Nippon Steel has yet to say anything about whether it is willing to accept the concept described by Trump and McCormick in place of its bid to buy the company outright.

Gov. Josh Shapiro, a Democrat, speaking at a news conference Tuesday at the University of Pittsburgh, did not discuss terms, but said “there’s still no deal signed, and there’s still a lot of work that needs to be done.”

Golden shares

Golden shares typically refer to special stakes the government takes in companies that are ailing or in particular need of government attention, like General Motors during the 2008 financial crisis. The United States doesn’t typically take shares in publicly traded companies. When it does, it’s usually because it has provided some type of financial assistance, like a bailout, and wants to protect taxpayer money.

The arrangement sparked immediate concern.

“It makes no sense for the United States to take a stake in it,” Douglas Holtz-Eakin, president of the conservative American Action Forum, said in an interview.

Holtz-Eakin said it was unclear what, exactly, the president envisions with the golden share.

“What does it do for U.S. Steel? Nothing,” he said. “It’s got another manager that doesn’t have a sort of business interest in it, and a completely different set of priorities on national security and other things.”

Nippon had been trying to acquire U.S. Steel, which has faced financial difficulty for years, for $14 billion. But President Joe Biden blocked the deal on national security grounds, citing concerns about a U.S. industrial giant being acquired by a Japanese company.

It was a rare moment of bipartisan agreement, with Trump also saying on the campaign trail that he would not allow U.S. Steel to be owned by a foreign company.

Union reaction

David McCall, president of the United Steelworkers union, which had vehemently opposed a sale of U.S. Steel to Nippon, said in a statement that the union “can’t speculate about the government’s reported ‘golden share’ or anything about the announced ‘partnership’ without more information.”

He added that “U.S. Steel is a critical producer in a critical domestic industry, and our concerns about Nippon, a foreign corporation with a long track record of violating U.S. trade laws, remain undiminished.”

This report contains information from the Associated Press.