Overview
In his second term, US President Donald Trump has prioritized safeguarding industries deemed critical to national security—using novel techniques. Amid mounting pressure for companies and foreign governments to increase domestic investments in key sectors, the White House has adopted new engagement strategies with private companies, such as acquiring shares, striking revenue-sharing agreements, and making direct investments to further steer the trajectory of the country’s most important sectors. Significant developments of the last several months (such as the White House’s “golden share” in US Steel) signal a stark departure from a purely free-market approach and a shift toward federal intervention that will reshape the domestic business environment. As the Trump administration asserts an unprecedented level of influence in the corporate world, C-suite executives, businesses, and foreign governments investing in the US will see new benefits, like access to capital, and risks as government pressures rise.
Investments and Partnerships to Boost US Industries
In recent months, the Trump administration has adopted more direct methods of intervening in the US economy to achieve its foreign and economic policy goals. Amid the rollout of sweeping country-specific and several product-specific tariffs, the Trump administration has also exerted heightened pressure on both US and foreign companies alike to accelerate investment in the US—and, in some cases, to cut in Washington. Thus far, nearly 100 corporate investments in the US have been announced, spanning a wide array of sectors, primarily focused on critical areas like technology infrastructure, energy, biotechnology, and pharmaceuticals. According to a White House list, companies have already announced nearly $2.5 trillion in new US-based investments during Trump’s second term.
Foreign governments have also committed to large-scale US-based investments, many of which were negotiated in exchange for tariff relief. Trump’s tariff strategy aims to reduce the trade deficit by encouraging Americans to buy US-made goods and pressuring foreign MNCs to build domestically. These investment pledges—including in shipbuilding and energy—are often described as “signing bonuses” by the Trump administration for the US to use at its discretion. Although many deals remain in the framework stage, Trump has threatened to raise tariffs on countries that fail to follow through.
What stands out as the most unprecedented approach by the Trump administration to revitalize the US economy is its direct engagement with private firms. While the level of federal involvement in the US economy has fluctuated throughout history—ranging from periods of laissez-faire policies to moments of expanded federal authority—previous administrations have typically stopped short of applying overt pressure or imposing restrictions on corporate decision-making. Analysts have pointed out that Trump’s second term represents an unprecedented level of state intervention in US corporate affairs in modern history. His significant influence over market regulations and industries signals a bold shift toward state-backed industrial policy—an approach long employed by China and heavily criticized by the US and its Western allies.
In June, Trump approved the long-awaited Nippon Steel’s acquisition of US Steel, which had been delayed over national security concerns. The breakthrough came when the USG was granted a golden share—a veto over corporate governance, US production, and trade decisions. While the government did not take equity away from owners, this arrangement gives it significant control. A month later, MP Materials Corp., the US’ only fully integrated rare earth elements producer, entered a public-private partnership with the Department of Defense (DoD). As part of the deal, the DoD purchased $400 million in MP Materials stock, becoming its largest shareholder.
In August, two additional semiconductor deals highlighted this strategy. First, two leading US semiconductor firms agreed to pay 15% of revenue from certain China sales directly to the USG—effectively making the government a partner in their China operations. This includes sales of Nvidia’s H20 chips, which were specifically designed for the Chinese market and cleared under the Biden administration for being less powerful than those sold to US allies. While the deal is unprecedented, proponents argue it helps recover taxpayer losses from prior chip bans. Critics, however, warn that it may enhance China’s AI capabilities and pressure other firms to accept similar arrangements.
Most recently, Bloomberg reported that the Trump administration may buy a 10% stake in a leading US semiconductor manufacturer using funds from the CHIPS and Science Act. The firm is one of the few US-based companies capable of producing high-end semiconductors at scale. The potential investment is seen as an attempt to encourage domestic manufacturing and reduce reliance on foreign producers. Like the MP Materials case, such a stake would make the USG the company’s largest shareholder.
The Trump administration’s steadfast focus on bolstering US industries aligns closely with Trump’s explicit linkage of domestic manufacturing revitalization to national security. He has argued that decades of offshoring have eroded US manufacturing output, increased reliance on foreign producers, and left Americans vulnerable to geopolitical and supply chain shocks—a concern that is especially pressing for critical infrastructure sectors. By leveraging access to US markets for foreign companies and restricting access to overseas markets for US companies—particularly in relation to China—Trump wields significant influence over corporate decision-making. For both domestic and foreign firms, announcing US-based investments is widely perceived as a means to secure favorable treatment from the administration, including tariff exemptions and improved market access.
Business Implications and Outlook
The Trump administration’s steadfast reshaping of industrial policy—marked by direct government equity stakes, revenue-sharing deals, pressure on US and foreign companies and foreign governments for investment—has profound implications for businesses operating in or adjacent to critical sectors. For businesses engaged in industries currently undergoing Section 232 investigations—which are intended to determine the impact of a product’s import on US national security—it is clear that aligning with US national security goals outlined by the Trump administration is strategic. With prospective tariffs as high as 300% on semiconductors and 250% on pharmaceuticals, firms looking to avoid duties may need to consider partnerships or direct investment from the USG.
While public-private partnerships and USG-backed deals may offer access to capital, preferential treatment, and insulation from tariffs, they also introduce new uncertainties. Companies must now navigate a landscape in which Washington is both a partner and regulator—with veto power, revenue expectations, and national security mandates. The USG’s golden share in US Steel and its 15% revenue claim on chip sales to China illustrate its new role. Internationally, increased USG investment in private firms may raise questions from foreign firms about the level of authority the USG will have over partnership arrangements. Moreover, while some, like Japan and the EU, have engaged in investment-for-access deals with the Trump administration, others may push back against what they view as transactional or coercive trade tactics (such as India).
Ultimately, the durability of this policy model will hinge on its economic payoff and political sustainability. If these arrangements deliver measurable wins—increased domestic manufacturing, reduced dependency on rival supply chains, job growth—the administration may be reluctant to relinquish influence over corporate affairs in the long term and could even extend its reach beyond its current focus on critical industries. Conversely, if these policies weaken business incentives and reduce ROIs, companies could find themselves stuck between government pressures and economic realities.
