Home Economics, Policy & Regulation Trump Stakes: Industrial Policy or Cronyism?
Author: Ronald Fink | Photos: Shutterstock
The White House’s acquisition of equity in U.S. companies raises questions about conflicts of interest.
This article appears in the November issue of Global Finance Magazine.
The Trump administration has joined a growing number of governments that have embraced industrial policy, often at the expense of strict free-market doctrine.
In an abrupt break from past practice, the federal government under President Donald Trump has taken equity or equity-like stakes in 34 private-sector companies in the U.S., as of Oct. 1, spanning industries from critical minerals and semiconductors to quantum computing. Its August 2025 announcement that it would take a 10% stake in Intel Corp. marks its biggest such step and makes the U.S. government the chipmaker’s largest shareholder.
The goal of industrial policy is to put a nation’s economy on a more globally competitive footing by providing government support, increasingly in the form of equity as well as loans and tax credits, to companies deemed strategically important for the economy or for national security. Details vary widely from government to government, but while others have taken equity stakes in private-sector companies, the U.S. approach raises serious concerns.
Critics warn that industrial policy can lead to rent-seeking by governments and corruption at the level of individual government officials. The Trump administration’s practices raise just this issue, according to critics on both the left and right.
In a recent blog post , Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, a Washington, D.C.-based center-right think tank, wrote that when state control is exercised in an ad hoc fashion through privately negotiated channels and without any pretense of independent oversight, as the Trump administration has done, “state ownership and control typically redistribute benefits to politically connected clients and away from the public. This potentially corrupting phenomenon is the prevailing concern with the Trump administration’s approach.”
“This is not what anyone could reasonably want from industrial policy.”
Dean Baker , Center for Economic Policy and Research
Dean Baker, co-founder of the Washington, D.C.-based progressive think tank, the Center for Economic Policy and Research, went further in an interview with Global Finance : “It would be overly generous to call this industrial policy. It is simply Trump arbitrarily exercising power. We don’t know whether he or his family have gotten kickbacks from the companies. This is not what anyone could reasonably want from industrial policy.”
The White House offered this statement in response:
“The only special interest guiding the Trump administration’s decision-making is the best interest of the American people. Securing and reshoring America’s critical supply chains has been a top priority for President Trump, and the Trump administration continues to take historic action to safeguard America’s national and economic security.”
Several members of Congress contacted for this story did not immediately respond to requests for comment.
Industrial policy is by no means synonymous with corruption and self-dealing. “There are many examples out there in the world of having more socialist orientation in the economy while still staying loyal and faithful most of the time to price s…