Having nationalized Nippon Steel, will Trump target the oil industry next?
In another example of his ever-growing list dictatorial actions, Donald Trump sealed a deal last week between US Steel and Nippon Steel that essentially nationalized the new entity — a move I believe could be a precursor to nationalizing the oil industry now that energy prices are about to skyrocket following his “brave” decision to go to war with Iran.
The Corporate Finance Institute defines nationalization as “the process in which a country or a state takes control of a specific company or industry. With nationalization, control that once resided within a corporation now lies with the government.”
This is exactly what happened to Nippon Steel (via New York Post):
Nippon Steel’s $14.9 billion acquisition of US Steel closed on Wednesday, the companies said, confirming an unusual degree of power for President Trump after the Japanese company’s 18-month struggle to close the purchase.
The companies also disclosed details of a national security agreement inked with the Trump administration, which gives Trump the authority to name a board member as well as a non-economic golden share.
The measures represent an unusual level of control conceded by the companies to the government to save the deal, after a rocky path to approval spurred by high-level political opposition.
The press release announcing the deal notes the golden share gives the US government rights, including, “The right to appoint one independent director; and Consent rights of the President of the United States, or his designee, on specific matters.”
In fact, the US government will have veto authority over a raft of corporate decisions, from idling plants to cutting production capacity and moving jobs overseas, as previewed in a weekend social media post by Commerce Secretary Howard Lutnick.
The share also gives the government a veto over a potential relocation of US Steel’s headquarters from Pittsburgh, a transfer of jobs overseas, a name change, and any potential future acquisition of a rival business, the release shows. (Emphasis mine)
One of the “benefits” of Nippon Steel ceding control to Donald Trump is that it will exempt the world’s fourth-largest steel company to avoid the 50% steel tariffs Trump is imposing on other foreign steel companies.
If you’re wondering how nationalized Nippon Steel and nationalized oil companies are connected, we need to first look back at Donald Trump’s first term when he first tried to nationalize oil companies.
In 2020, America was in the early stages of a Great Recession 2.0 after Trump and a nearly unanimous Congress butchered the free market economy by shutting it down in response to COVID along with an excessive government spending in the form of bailouts and stimulus packages in a vain attempt to the self-inflicted problem created by Trump’s COVID tyranny.
During this time, oil and gas industry witnessed a period of great price uncertainty due to this interference. In response to this record-breaking negative impact, Donald “King of Debt” Trump suggested propping up the oil industry with a package of emergency loans that would eventually give government ownership of energy companies.
The program, designed by then-Energy Secretary Dan Brouillette and then-Treasury Secretary Steve Mnuchin, required participating oil companies to give government an equity position much like Obama required of automobile companies in the TARP bailouts during the first Great Recession.
American Exploration and Production Council CEO Anne Bradbury identified Trump’s end goal with this program when she told the Washington Examiner, “We have concerns with a lending program that gives the government a stake in independent oil and gas companies or moves our industry toward nationalization.” And Mike McKenna, a fossil fuel lobbyist, warned that such ownership in the hands of a future administration could give government the power to force carbon reduction efforts on the energy industry or simply shut it down — a goal of the Green New Deal which was heavily pushed during the COVID “crisis.”
This loan program wasn’t Trump’s only foray into government ownership of critical industries during his first term; he also had a plan in place to nationalize the 5-G network.
Fast forward to today.
In the aftermath of Trump’s Republican-approved decision to go to war against Iran, oil companies are already feeling the heat of an uncertain energy market. Global markets are bracing for impact and oil prices are expected to spike, creating the potential for broader economic consequences.
In response to the inevitable news of higher energy prices, Trump issued a warning to oil companies telling them not to raise oil prices, and he further promised that he’d be watching them to make sure they comply with his dictates:
Keep oil prices down? I’m watching? Sounds to me like Trump is only a hop, skip, and a jump away from nationalizing oil companies.
As you might expect, nationalizing American industries has its roots in the Democrat Party, but in true uniparty fashion, it has been embraced by Republicans as well.
For example, during the waning years of George W. Bush’s presidency, America was in the early stages of a Great Recession caused by the government interference with the free market “economy” in areas like real estate, banking, and energy. This is when “W” first uttered the words that he had “abandoned free market principles to save the free market.”
Then, as now, government interference had caused oil and gas prices to skyrocket before causing them to plummet, leading to congressional hearings with oil company executives where members of Congress tried to pass the blame. It was during these hearings that Rep. Maxine Waters threatened to nationalize (i.e. socialize) the oil industry.
“And guess what this member would be all about? This member would be all about socializing — er, uh. [Pauses for several moments] …. would be about … [pause] … basically … taking over, and the government running all of your companies.”
You know, it wasn’t all that long ago that AOC and like-minded Democrats preached the evils of capitalism and the need to replace it with socialism or Marxism. Now, unfortunately, that idea has been adopted by Donald Trump in the name of Trumpism and nationalism.
Today, Nippon Steel. Tomorrow, the oil industry. The day after tomorrow? Only Trump and the spineless Republican Party know the answer to that one.
David Leach is the owner of the Strident Conservative and the author of The New Axis of Evil: Exposing the Bipartisan War on Liberty. He holds people of every political stripe accountable for their failure to uphold conservative values, and he promotes those values instead of political parties.
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