In brief

President Trump’s directive to re-review Nippon Steel’s acquisition of U.S. Steel – after it was blocked by the Biden administration – marks an unprecedented intervention in the CFIUS process and underscores how political priorities are shaping national security reviews.” While the deal appears to be proceeding with revised mitigation terms, including a reported “golden share” arrangement, its handling reveals a growing willingness to subordinate the process to politics. Yet, key legal questions about due process and presidential authority remain unresolved.

Raised from the grave

Initially blocked by the Biden administration for purported national security concerns in January 2025 (with Nippon subsequently challenging the block in court), the deal underwent an unprecedented re-review at the direction of President Trump.  Trump’s directive required CFIUS to reevaluate whether national security concerns could be mitigated). He ultimately revised Biden’s order to lift the prohibition so long as the parties agree to and comply with a National Security Agreement (NSA) similar to a draft agreement that CFIUS has proposed to the parties, echoing President George W. Bush’s nearly 20-year-old action accepting the high-profile Lucent Technologies / Alcatel NSA and merger following CFIUS review.

An unprecedented CFIUS process from the beginning

Leaks from the Biden administration’s CFIUS process indicate that certain members of the Committee thought the rejection by that administration of Nippon Steel’s proposed acquisition on national security grounds—unprecedented for a Japanese transaction—was led by politics, not national security. Key factors in the Biden administration’s rejection of that transaction were the lobbying efforts of competitor Cleveland-Cliffs and the United Steelworkers union, whose leadership vocally opposed the deal during an election year.

While the Biden administration framed its opposition as a national security imperative for domestic steel production, many experienced observers believed the case for a national security risk arising from a Japanese acquisition was thin and the case for prohibition even thinner. Their view, instead, was that the decision was driven by winning the U.S. presidential race and appeasing labor special interest groups rather than addressing legitimate security risks.  Biden notably articulated his opposition to the deal before CFIUS even first began its review of the transaction.

President Trump’s order that CFIUS conduct a de novo review of the transaction—after he too had come out against the transaction as a presidential candidate—was similarly unprecedented, with the rhetoric leading up to and surrounding the review underscoring the politicization of CFIUS’s review of the transaction. Historically, once CFIUS completes its review, and the transaction is blocked by the president, the review outcome is considered final.   

President Trump, following the CFIUS re-review, has now cleared the deal subject to a revised structure that includes a planned partnership between U.S. Steel and Nippon, the full details of which are not public.  The deal purportedly also includes a perpetual “golden share”.  The Nippon clearance presents a potentially useful data point in the administration’s America First Investment Policy, which notes that “Economic security is national security.”

A politicized process results in a politicized outcome

Leading up to the Biden administration prohibition order there was extensive involvement by commercial stakeholders such as U.S. Steel competitor Cleveland-Cliffs – which made a failed $7bn bid for U.S. Steel in August 2023.  Alongside the United Steelworkers union, which agreed to support Cliff’s bid, the company engaged in extensive lobbying efforts to push President Biden to block the deal including engaging with leadership of CFIUS member agencies such as U.S. Trade Representative Katherine Tai.  Nippon’s legal proceedings alleged these actions amounted to an anticompetitive conspiracy to prevent the deal to monopolize critical domestic steel markets.

Like the Biden administration, Trump has focused on labor issues and presenting a perceived win for the administration rather than traditional national security concerns. Describing the negotiations at a June 2 rally at a U.S. Steel plant, Trump stated that “every time they came in, the deal got better and better and better for the workers … I didn't give a damn about anybody else, if you want to know the truth.”

Presidents typically refrain from commenting on live CFIUS reviews to avoid interfering with ongoing efforts by career staff to conduct their risk analysis and, as necessary, negotiate mitigation remedies.  However, in a particularly high-profile case, the White House will be in communication with the Committee to be kept apprised of its work and make sure that the remedies it is developing are consistent with the broader policy goals and preferences of the President.  

President Trump’s public remarks give a window into the guidance that is likely being filtered down to the Committee. When considered alongside Trump’s America First Investment Policy, these remarks seem to suggest that alignment with the administration’s narrative (i.e., reshoring and rebuilding U.S. industrial capacity) may increase a deal’s chances of the White House weighing in on the side of clearance in a particularly high profile transaction.

We may never know the actual substance of the final NSA that the Committee submitted to the parties on June 13, 2025, but it appears to include a number of politically favorable terms for President Trump, including roughly $11 billion in new investment and control of certain major decisions through a “golden share.”

“Golden share,” form over substance?

The description of some commitments supposedly sought by CFIUS of Nippon Steel – excluding the capital investments to be made in U.S. Steel – are consistent with terms that CFIUS frequently includes in NSAs to address supply assurance risks for critical defense programs. Others, including the requirement that the President consent to a change of name of the company, protections of employee salaries, and anti-dumping pricing, go beyond what is typically asked to mitigate national security risks. Further, taking the administration’s statements literally, it appears that in addition to effectuating them in an NSA, they will be memorialized in the form of a “golden share.”

A requirement that a company actually issue a golden share as a condition of clearance is novel in the CFIUS context. Reporting indicates that the administration is not merely using the term “golden share” as shorthand for a bundle of governance rights. Rather, the U.S. government will perpetually retain a class of non-economic preferred  stock that will provide government control over significant commercial decisions of U.S. Steel.  This is highly unusual, as in recent history the U.S. government has only taken a share in ailing companies that played a significant role in the economy, like General Motors, Fannie Mae, and Freddie Mac during prior financial crises. Members of President Trump’s own party have criticized China’s use of “golden shares” as recently as last month.

Legal questions around the golden share structure

Such a structure raises meaningful legal questions: chiefly, whether the government’s rights would derive from statute (as in a conventional mitigation agreement) or instead flow from its contractual rights as a shareholder. Treasury’s Office of General Counsel will undoubtedly identify and analyze such complexities. Still, it is notable that the Trump administration appears willing to accept a degree of redundancy in exchange for political optics, specifically, the spectacle of securing a “golden share” rather than relying on a more conventional and less symbolically potent set of mitigation measures likely agreed to in the traditional NSA.

No clarity from the courts

The approval of the transaction mooted the petition for review of the Biden prohibition, resulting in no ruling from the court on whether CFIUS failed to provide the parties adequate due process or President Biden’s order to prohibit the transaction was ultra vires. Such a ruling could have had significant implications on the CFIUS process, either through making it clear that even specious national security risks are shielded from judicial review or establishing critical guardrails to ensure that CFIUS remains focused on its national security mandate. While the CFIUS process itself remains unchanged, the transaction underscores how political context can elevate scrutiny – even in the absence of legal reform. Investors should continue to factor public sentiment and geopolitical narratives into their deal strategies.

Key takeaways

• Expect the unexpected – but know it's rare. The Nippon Steel/U.S. Steel case is highly atypical; most deals are unlikely to face similar political intervention.
• Plan early for political sensitivity. For deals with potential political exposure, early engagement with CFIUS counsel and strategic public affairs planning is essential – especially when competitors or unions may try to influence the review process.
• Think beyond traditional national security. Assess the broader industrial and economic role of the target business, and consider how the deal aligns with U.S. strategic priorities.
• Structure matters. Tailor deal terms – like efforts clauses or break fees – with CFIUS risk in mind, and be prepared to offer political or economic “sweeteners” that align with White House goals.
• Optics can outweigh process. In some cases, symbolic commitments (like a “golden share”) may help secure approval even if substantively equivalent to standard mitigation terms.

With thanks to Freshfields Aimen Mir, Brian Reissaus, Christine Laciak, Colin Costello,  Andrew Gabel, Ian Allen and Kate Applegate for contributing to this update.