What Trump’s golden share means for the Nippon deal

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0:32Sonja Huts: Good morning from the Financial Times. Today is Tuesday, June 17th, and this is your FT News Briefing. The EU-China relationship is souring, and the attacks between Israel and Iran could have a ripple effect on the energy market. Plus, we're going to take a look at what the Nippon Steel deal means for the Trump administration. I'm Mark Filippino, and here's the news you need to start your day.

1:02Sonja Huts: The European Union is boycotting economic talks with China, as according to sources who spoke to the FT. These talks would have laid the groundwork for this year's EU-China Leaders Summit in July. Now, the two sides still have a number of ongoing trade disputes, and the EU said it would only want to meet up if it had a guarantee that certain agreements would be implemented at the Leaders Summit. China's been trying to strengthen its bond with Europe as a way to counteract U.S. President Donald Trump's tariff war. But the EU and China have been engaged in tit-for-tat trade disputes since last year when Brussels imposed tariffs on Chinese electric vehicles.

1:45Sonja Huts: The conflict between Israel and Iran has a new front line, energy. The price of oil jumped after Israel launched strikes last week. Maybe not as much as people thought it would, but a wider conflict might mean there will be a lot of uncertainty for the market. Here to tell us more is the FT's energy editor, Malcolm Moore. Hey, Malcolm. Hi, Mark. So, Malcolm, tell me a little bit more about these Israeli strikes on Iran's energy infrastructure. What exactly did they hit?

2:11Mischa Frankl-Duval: So this really started Saturday night. The first thing that we saw was that they hit a gas processing plant at the South Paz gas field. Now, that is the world's largest gas field, and the gas field is split into 24 phases and they just hit one of the plants or two of the plants on one phase of the gas field. So it wasn't a huge thing and there wasn't that much damage, but the fact that they were targeting that gas field sent everybody into a bit of a panic. And then later on Saturday night, they took out a couple of big fuel depots in Tehran itself in the capital. And we've seen since then other attacks on mainly fuel depots its bits of energy infrastructure, but it's all to do with Iran's own domestic supplies of energy.

2:58Mischa Frankl-Duval: Israelis don't seem to be targeting energy for export, as it were.

3:02Sonja Huts: So Malcolm, obviously targeting a very specific part of Iran's energy sectors, what is Israel hoping to achieve with these strikes?

3:11Mischa Frankl-Duval: So I think it falls into the broader pattern of what Israel is trying to do here, which is to try and disrupt and destroy Iran's critical infrastructure. They've taken out the airspace and commanded the airspace, and they're now going after targets to basically stop Iranian society functioning as normal and to stop any sort of military response. It sounds like it's pretty painful for Iran domestically. I mean, it's extremely painful for Iran domestically, and you can see that Iran has responded by trying to do the same to Israel. So they have fired missiles at Israel's largest oil refinery in Haifa.

3:49Mischa Frankl-Duval: And on Monday, the owners of that refinery had their shares suspended on the Israeli Stock Exchange. They said that they had to stop trading until they could issue a report on the situation. Yeah, I'm glad you brought up markets.

4:01Sonja Huts: How have the broader markets reacted to these strikes on energy facilities?

4:05Mischa Frankl-Duval: Okay, so in terms of the energy markets, all over the weekend, while these strikes were underway, the markets were shut. and lots of people suggested that they would reopen sharply higher on monday indeed the oil price did jump about five percent of the open on monday morning in asia but it really quickly paired those gains and now it's actually fallen you know this is monday afternoon uk time oil is about four percent down on the day why would that be so i think one thing to make clear is that the oil price did jump already last week when the conflict started. There was a very sharp sort of 10 % jump by Monday morning.

4:44Mischa Frankl-Duval: And at that point, I think people just started to look at whether the market was well supplied or not, whether the oil was still flowing or not. And it is. Given that situation, people have probably just taken profits.

4:56Sonja Huts: So they're calm for now. But how could Israel targeting Iran's energy sector spill beyond the country's borders? Is there anything that could get markets more upset.

5:06Mischa Frankl-Duval: Yeah, there's a lot of things that could get markets more upset. So whilst people are trading the oil price down at the moment, I think it would just take one big attack on a critical piece of export infrastructure for the market to react. And that could happen at any point. There doesn't seem to be any de-escalation at the moment or any path to de-escalating the current crisis. And what we've seen in the past is that when Iran is backed into a corner, it does have options open to it. In 2019, it temporarily halted about half of Saudi Arabia's oil production after launching a strike on a big refinery there.

5:40Mischa Frankl-Duval: And of course, Iran continues to threaten to close the Strait of Hormuz, which is that narrow waterway through which basically a third of the world's seaborne oil passes. Now, we haven't seen any change in shipping along that route yet. But if Iran started firing missiles at ships in the strait, then I think the market would react pretty quickly.

6:00Sonja Huts: That's the FT's Malcolm Moore in London. Thanks, Malcolm.

6:04Mischa Frankl-Duval: Thanks, Mark.

6:11Sonja Huts: Airbus dominated the first day of the Paris air show. The aircraft manufacturer unveiled almost $10 billion worth of orders. Those included deals with Saudi Arabian leasing company Avilis, Riyadh Air, and the Polish airline Lott. Its rival, Boeing, meanwhile, cut back on its activities there after last week's fatal Air India crash that involved one of its planes. Boeing's CEO and its head of commercial aircraft both canceled their plans to attend the air show. Investigators in India are still trying to figure out what caused the crash.

6:50Sonja Huts: Now we mentioned in yesterday's show that Nippon Steel finally got the all clear from the Trump administration to buy U.S. Steel. But they had to make a pretty big concession. Nippon gave the U.S. government something called a golden share. And that is highly unusual. The FT's Wall Street editor, Sujit Indapt, is here to tell me about what it might mean for future deals. Hey, Sujit. Hey, Mark. Good to talk. Good to have you. So walk me through this golden share. What does the U.S. government get out of it? Essentially, the U.S. government and the current Trump administration is going to get a seat at the table in the decision, the corporate decision making of U.S.

7:31Sonja Huts: steel, which will become a subsidiary of Nippon steel. So it's literally just a seat at the table to be able to have its voice heard in the boardroom and in decision making around production and operational issues. And it's obviously very unusual. Yeah. Why is it so unusual? Well, we think of the private sector as just that, that companies are free to make the decisions they want in conjunction with shareholder oversight of the board. And the government typically does not have a seat at the table. They don't typically own shares in the private sector companies. But we have seen the government in bailouts, particularly during the financial crisis, take equity or warrants that turn into equity into like General Motors or Fannie and Freddie, the mortgage insurers and finance companies.

8:22Sonja Huts: But those were typically economic investments that came with governance rights. The interesting thing about the golden share here is that based on the reporting from others that the share itself is strictly governance. There's no economics that the government is going to extract from U.S. steel particularly. What does this golden chair signal about the Trump administration's tactics of engaging with the private sector? So the deal itself did need to be approved by the government. If you recall, this deal had been controversial from the beginning because obviously it was a foreign company buying a U.S.

8:56Sonja Huts: company and taking control. The Biden administration engaged in a long review and ultimately, for national security reasons, decided not to let the deal go through. The Trump administration also was hostile to the deal. But through these negotiations, they found a way to actually get the deal apparently done. We'll see the details shortly. But the concessions needed to get the deal done was this idea that the Trump administration suddenly was going to get this golden share and be in the middle of this private sector company and be involved in making decisions. So that is a controversial part that will the Trump administration now insert itself into other deals?

9:34Sonja Huts: Is this just a preview of things to come, which is definitely going to be a concern in corporate America? Yeah, I can imagine. What happens if this becomes some sort of model for other sorts of mergers? Yeah, there are big deals out there where the Trump administration has inserted itself. One is the buyout of Paramount by Skydance, which needs approval from the FCC, and there's a bunch of controversy there. Where in the sports world, there's this merger between the PGA Tour and the Saudi-backed live tour, and Trump is in the middle of those negotiations. So it's definitely gotten the attention of corporate advisors, bankers, lawyers, as well as CEOs, where there's a big, large transaction that has some sort of national security or antitrust component.

10:20Sonja Huts: Are there going to have to be particular concessions made, unusual concessions that just give the Trump administration power into future decision-making? And is that going to be worth it for these companies? Well, is it worth it for Nippon? That's really interesting. So from Nippon's point of view, it is one of several Japanese companies that's been trying to grow operations in the U.S. because the U.S. is so fast growing relative to their home market. It's big, it's prosperous. And having a foothold in this market was really valuable for them. They paid a big premium. Trump obviously has imposed tariffs on imported steel, which he increased a couple of weeks ago.

10:59Sonja Huts: And from Nippon's point of view, you know, being in the U.S. domestically, apparently is going to be worth whatever it is that has to deal with the Trump administration going forward. That's the FT's Sujit In-Depth. Thanks, Sujit. Thanks, Mark.

11:16Sonja Huts: You can read more on all these stories for free when you click the links on our show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news.

11:36Sonja Huts: The next five podcast is all about AI sovereignty. Stefan Israel at AWS joins me. Digital borders shall not become digital worlds which are not interconnected. As does Catherine DiLorenzo at A &O Sherman.

11:50Mischa Frankl-Duval: It looked like a race to write the rulebook and not just a race to build the most powerful technology.

11:57Sonja Huts: And Ali Usten at McKinsey. Sovereign deep bankers, data centers, engineering and AI talent in the country. Listen to The Next Five wherever you get your podcasts. Enjoy. Capital raising is being redefined in real time, from macro disruptions and shifting investor expectations to AI-driven demand and the rise of private credit. When headlines can tilt markets overnight, how can companies stay on course? Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter.

12:34Sonja Huts: Listen to Strategic Alternatives, available wherever you get your podcasts.