When President Trump in June approved Nippon Steel’s acquisition of US Steel on the condition that the U.S. government receive a “golden share” in the new venture, most viewed the arrangement as a one-time event. Then, in July, the Department of Defense announced plans to take a 15 percent equity stake in rare earths miner MP Minerals. And in August Trump announced plans to repurpose a Biden-era subsidies to U.S. semiconductor manufacturers to take a 10 percent equity stake in the American chipmaker Intel.

These deals — alongside hints that Trump officials are considering similar investments in other companies, like defense contractor Lockheed Martin — sparked outrage among pundits, with the Wall Street Journal concluding that “capitalism in America is starting to look like China.” Yet the real story is not the revolutionary nature of the actions; the U.S. government has throughout its history established, purchased, or otherwise controlled private companies to ensure that certain industrial activities meet national priorities. Rather, what’s concerning is that the administration appears to have set these deals up to fail at achieving their stated industrial policy goals.

 In all three cases, it’s not hard to argue that action was needed. These corporations each produce key inputs for products critical to national security, yet they have fallen behind foreign competitors, who in turn have concentrated global production of these vital goods abroad. That’s why the Biden administration first launched the effort to increase domestic production of steel, critical minerals, and semiconductors to reduce U.S. dependence on foreign suppliers.

 Historically, the U.S. government has repeatedly taken de facto control over management of private businesses — starting early in the Republic with armories and shipbuilding. During World War I, the Wilson administration temporarily nationalized the entire railroad industry. In the 1970s, the government established the Consolidated Rail Corporation to buy out the failing Penn Central railroad, which it then managed for 15 years. After the government bailed out Lockheed in 1971, it asserted a right to oversee its financial records and decision-making.

Although the crises facing the steel and semiconductor industries today may not have the same immediacy as war, these corporations undeniably need support to be able to supply the inputs needed for U.S. national security, technological, and climate goals.

Trump’s golden share in US Steel grants the government veto power over management decisions that raise national security concerns, such as the closing of domestic facilities. This addresses the major risks of a foreign acquisition of US Steel, which faced no other good options for staying solvent despite having long benefited from subsidies and trade protections.

Prior to its deal, MP Minerals received a combined $148.5 million from the Pentagon and Inflation Reduction Act (IRA) to support its re-opening of the Mountain Pass mine and the creation of new domestic facilities to process rare earths and manufacture rare earth magnets. Mountain Pass was the world’s largest rare earths producer in the 1970s and 1980s, but closed in 2002 after growing Chinese supply drove down global prices. The Pentagon’s new $400 million equity investment makes them the corporation’s largest shareholder.

Intel, meanwhile, was awarded $10.86 billion in grants through the Biden administration’s CHIPS Act to increase domestic semiconductor production. Trump’s deal takes the $8.9 billion in grant money not yet been disbursed and transforms it into an equity investment. The administration argues the deal will allow taxpayers to recoup this money if Intel succeeds financially.

The real test of these deals is whether they deliver as promised. Unfortunately, it appears that Trump is undercutting them through his other signature policies.

First, Trump’s attacks on green industries, from electric vehicles to offshore wind, are driving down demand for inputs like steel and rare earths. Since the Pentagon’s deal includes a purchase guarantee for MP’s magnets, any drop in demand from green sectors will increase the financial burden of keeping MP Minerals afloat.

A second concern is that Trump’s attacks on foreign workers — epitomized by the recent ICE raid at a Hyundai battery factory in Georgia — will complicate these corporations’ ability to attract skilled workers away from foreign competitors.

Third, it’s unclear whether the administration can keep these corporations aligned with its industrial policy goals. The golden share, for instance, gives the government no mechanism for holding Nippon Steel to their investment pledges. Meanwhile, Intel has a long history of cannibalizing its core functions to pay dividends to its investors, and has indicated that it plans to use Trump’s equity funding to pay its debts rather than investing, as Biden’s grants had required, in domestic manufacturing.

 Superseding these tactical questions, however, are concerns that Trump’s real priority is consolidating his own power. Unlike either the IRA or CHIPS, these deals are conducted without any Congressional oversight. Left unchecked, publicly owned equity becomes just one more industrial policy, alongside tariffs or antitrust enforcement, that Trump can use to reward or punish businesses based on his political whims.

The Open Markets Institute and Article 19 will co-host a major conference, “The Future of Democracy: Speech, Thought, Sovereignty, and Power in the Age of Platforms and AI,” October 15 and 16 in Brussels. The conference will bring together leading thinkers, lawmakers, and advocates to discuss the threats to our democracies and basic liberties posed by today’s dominant tech platforms, the rise of AI, and interference by foreign states. The event will be a powerful statement in defense of human liberty and the sovereignty of democratic nations and could not come at a more critical time for the freedom speech. We will be joined by Nobel Peace Prize laureate Maria Ressa; Europe’s Commissioner for Democracy, Justice, and the Rule of Law Michael McGrath; former Italian President and former Competition Commissioner Mario Monti; former EVP of the European Commission Margrethe Vestager; U.S. Senator Chris Murphy;  Elevation Partners Founder Roger McNamee; FrenchMinister of State for Digital Affairs Clara Chappaz, and many other leading voices. Register here for the livestream.

Open Markets Institute’s chief economist Brian Callaci will publish his first book Chains of Command: The Rise and Cruel Reign of the Franchise Economy on April 20 through University of Chicago Press. The book offers a sharp critique of the franchise model used by many fast food chains, which has shaped labor markets, corporate power, and inequality in the U.S. In Chains of Command, Callaci shows how franchisors have altered the legal treatment of corporations in their favor through a decades-long crusade of lobbying and litigation, and argues for greater cooperation between workers and small franchise owners. Pre-order the book here.

Open Markets Institute submitted an amicus brief in United States v. Google, urging the court to force Google to sell off its ad exchange and publisher ad server. The brief argues that such actions will help restore competition in the digital advertising technologies market in ways that protect news publishers and broadcaster, advertisers, and citizens, while also promoting a stronger democracy. OMI policy counsel Tara Pincock argued that only structural relief would end Google’s illegal dominance of the adtech market. The remedies decision on Google’s ad tech monopoly will come on the heels of a disappointing decision in the Google search case, in which the judge not only opted against forcing divestitures but also outlawing abusive practices the tech giant used to maintain its illegal monopoly. Read the brief here.