President Donald Trump has adopted a strategy normally seen in periods of wars or economic crises: to take direct participation in companies in the name of national security. The American portal CNBC published a report on the subject this Saturday (26).
The first example involves Nippon Steel, Japan’s largest steel producer. Last month, in a $ 14.9 billion agreement. As a “reward” by the agreement under his administration, Trump received a “Golden Share”, a special type of action that gives the politician the power of veto on decisions.
This month, the Defense Department also agreed to acquire a participation of US $ 400 million in the Rare Land MP Materials Materials, making Pentagon the company’s largest shareholder.
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In January, the current administration of Uncle Sam’s land also proposed that the country bought 50% of Tiktok as part of a joint venture. If the company bytedance, owner of the platform, do not officialize the sale to the nation until September 17, it will be.
For Sarah Bauerle Danzman, a foreign investment expert and national security at Think Tank Atlantic Council, a Democrat would be “accused of communist” if he took such an attitude, and many republicans would probably not feel comfortable following. Trump, the expert said, is expanding the limits of what is possible in the US in terms of state intervention in the economy.
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The US has a history of intervention in strategic sectors, according to the report, but only when national security is at stake – in times of war, economic crisis or as a way to rescue bankruptcy companies.
In the 1970s, for example, giants such as Lockheed and Chrysler received government financial help. Already in 2008, the US government bought a majority participation at General Motors to prevent the automaker from breaking during the financial crisis.
More interventions
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More interventions may be on the horizon as the Trump government develops a policy to support American companies in strategic sectors against state competition in China.
Interior Secretary Doug Burgum said in April that the US government may need to make a “capital investment in each of these companies that are competing with China in essential minerals.” Pentagon’s investment in MP Materials is a model for future public-private partnerships, said CEO James Litinsky.
“It’s a new way to accelerate the free market and get the supply chain we want,” Litinsky told CNBC. The US government is helping the mining industry to combat “Chinese mercantilism,” said the CEO.
