Trump, Japan and the era of 'stick-holder capitalism'

Nippon Steel's $19 billion deal for US Steel reflects a version of capitalism that does not fully serve the interests of shareholders.

- Leo Lewis

After 18 months of bargaining, multiple White House interventions, a presidential election, a snarling lawsuit, a xenophobic rant, two national security reviews and a government golden share, Nippon Steel has finally secured approval to buy US Steel.

The US$15 billion (S$19.3 billion) takeover makes history for many reasons, but perhaps most potently as a marker of era change: It is the first large-scale cross-border deal in the age of "stick-holder capitalism" - which is like stakeholder capitalism but with at least one particularly heavy-handed stakeholder.

It is no coincidence that this tormented transaction, and the stunningly intrusive powers Nippon Steel has been forced to grant current and future US administrations in order to win the presidential nod, should be the landmark. The epoch has arrived through a process of juddering evolution, with Japan as one of the principal non-US passengers involved.

In stick-holder capitalism, companies remain fundamentally propelled by the usual forces, but at the permanent, tempering risk of punishment, inconsistency, coercion and sudden, top-down rewriting of concepts or rules that previously seemed inviolate. Mr Donald Trump did not provide all the ingredients for this dish, but he has cooked them together with astonishing speed and dedication.