Trump's Economic Influence or Trump's Economic Action
The U.S. government is taking a more active role in the private sector, with a focus on manufacturing. This shift comes as President Trump expresses concerns over the decline of the U.S. manufacturing base, a long-standing issue.
One of the most notable examples of this intervention is the government's acquisition of a significant stake in Intel. The U.S. government holds approximately 10% of Intel's shares, but there is no indication that President Trump or his administration has acquired stakes in other national corporate shareholders, beyond Intel at this time.
In an effort to encourage supply chains to return to the U.S., higher tariffs are being imposed. However, the extent to which the administration will continue to intervene in the private sector remains uncertain.
The government's involvement extends beyond Intel and includes companies like U.S. Steel. Moreover, the government is working on creating a mine-to-magnet rare earths supply chain with MP Materials.
Most of the president's moves have a national security angle, with a focus on industries where competition with China is a concern. For instance, the administration has proposed taking a significant stake in major defense contractors such as Lockheed Martin.
In sectors critical to national security, public-private partnerships are being established. This trend is particularly evident in the biopharma industry, where companies have pledged over $292 billion to expand U.S. manufacturing in the past six months.
With these moves, the U.S. government aims to bolster its manufacturing sector and secure its competitive edge in industries where China poses a significant challenge. The future of this interventionist approach in the private sector remains to be seen.
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