Increasing government intervention in foreign investment in the name of national security
On the July 25 episode of NPR’s Planet Money, Hamilton Lugar School Associate Professor of International Studies Sarah Bauerle Danzman offered expert insight into the U.S. government's unprecedented role in the sale of U.S. Steel to Japan’s Nippon Steel. A former Committee on Foreign Investment in the United States (CFIUS) case officer at the U.S. State Department, Bauerle Danzman explained the national security mechanisms behind the deal, which President Trump dubbed a “golden share.”While the term evokes powerful shareholder rights, Bauerle Danzman clarified that the share is only symbolic, “because the U.S. government does not appear to actually hold an equity stake in U.S. Steel.” Instead, she described it as “a novel arrangement” where the government gains “extra-special governance rights” without ownership.
The agreement gives the U.S. president veto power over major decisions, including factory closures and executive pay—an unusual level of control for a foreign-owned, publicly traded company. Bauerle Danzman warned that such deals could deter future foreign investment, noting, “They’re exposing themselves to quite a bit of risk… those decisions are no longer going to be determined by market conditions, but instead… by political conditions.”
Bauerle Danzman held her position at the State Department through the prestigious Council on Foreign Relations International Affairs Fellowship from 2019-2020. The Fellowship, which annually awards a handful of scholars the ability to work in government or international organizations on issues of U.S. foreign policy, facilitates research and teaching bridges between scholarship and practice. Bauerle Danzman brings this applied experience – and a large network of foreign policy professionals – to her HLS courses on global business, international development, geoeconomic statecraft, and global governance.
Hear the full episode at NPR’s Planet Money.