Economic Action by Trump Administration

The United States government is undergoing a significant shift in economic policy, with a growing federal involvement in parts of the private sector. This shift, which began during Donald Trump's first term and is being cemented by the current administration, is aimed at supporting the nation's manufacturing base and enhancing national security.

One of the key strategies being employed is the acquisition of major shares in companies like Intel and U.S. Steel. This move is designed to bolster the manufacturing sector, particularly in industries where there is ongoing competition with China, such as steel and high-tech areas like semiconductors. Higher tariffs are also being imposed to encourage supply chains to return to the U.S., with biopharma being one of the industries affected.

The policies focus on sectors critical to national security, with public-private partnerships being established in these areas. The administration has also considered taking a big stake in major defense contractors such as Lockheed Martin. However, the policies are limited to where the White House has clear leverage, such as extensive federal subsidies or pending merger approvals.

The national security angle is a recurring theme in the president's moves, with the decline of the U.S. manufacturing base being a long-running concern. The risk of a legal backlash grows if Trump pushes further, for example, by requiring companies to give shares to the government as a condition of receiving contracts, permits, and licenses.

For those interested in understanding the impact of tariffs on the stock market, a special issue titled "How Do Tariffs Impact the Stock Market?" is available. Another special issue, titled "Breaking China's Stranglehold on Rare Earth Elements," delves into the administration's efforts to reduce dependence on China in critical industries.

For readers seeking insights into Donald Trump's leadership, a special issue titled "Donald Trump Tests His Limits" is available. The U.S. government is also offering subscriptions to Kiplinger Personal Finance for $24.95 for 12 issues, with potential access to up to 4 special issues.

This shift in economic policy is a significant development that promises to reshape the U.S. private sector and its relationship with the government. As always, it is essential to stay informed and understand the implications of these changes.