Overview
Under the second Trump administration, the relationship between the private sector and the White House’s foreign policy goals has become markedly closer and more entwined. Today, governments no longer rely on firms mainly as passive targets of sanctions, tariffs, or industrial policy, but rather increasingly depend on them as the systems through which statecraft operates: banks decide which transactions clear their books; insurers and shipowners determine whether trade can move through a conflict zone; technology firms and allied suppliers determine whether export controls impose real costs. In the United States, this rebalanced relationship has become more explicit: Washington has increasingly tried to mobilize private capital, private risk-bearing capacity, and private industrial scale as instruments of national strategy. The result is a version of economic statecraft that is more transactional, more state-directed, and more openly tied to industrial competition, specifically with China. The goal is no longer just to influence behavior abroad, but to mobilize private-sector power to shape the foundations of geopolitical power. Sectors sensitive to national security—including critical minerals, shipbuilding, steel, tech, or defense—may benefit from upside risks of state support in new projects that would not have made sense under private conditions alone. However, companies exposed to US rivals must be vigilant to geopolitical risk, which may result in new controls and disrupted contracts.
The Evolution of Economic Statecraft
For the US, economic statecraft has long meant turning economic access into strategic leverage. In earlier periods, that leverage was exercised through instruments the government more directly controlled, such as tariffs, embargoes, and wartime blockades. After the Cold War, and especially after 9/11, the emphasis shifted away from physical interdiction and toward financial sanctions, export licensing, and compliance systems embedded in global commerce. This allowed Washington to project power through the centrality of the dollar and the reach of US-linked financial infrastructure. The government no longer had to stop every transaction itself. Instead, it could make certain forms of trade, finance, and investment far more difficult by pushing firms to police access to the system on its behalf. Even this earlier model depended heavily on the private sector: the US’ modern sanctions system works only because firms built the internal systems needed to screen transactions and identify prohibited conduct. Governments define the rules, but commercial actors were the ones expected to verify attestations and decide whether cargo could move.
What is different today is how much more of the strategic terrain itself now sits in private hands. The most important chokepoints are often owned or operated by companies rather than governments. Semiconductors offer a clear example of how they can be weaponized. The US Bureau of Industry and Security (BIS) semiconductor controls that were launched in October 2022, and tightened in October 2023, restricted China’s access to advanced computing chips and the equipment needed to manufacture leading-edge semiconductors. Their impact, however, came from the fact that the most important bottlenecks were commercially owned. Firms controlled the software, tools, and equipment that made advanced chip production possible, while allied governments, especially in the Netherlands and Japan, oversaw adjacent firms at other critical points in the supply chain, a different situation than when governments used to control and run all cutting-edge R&D.
This shift changes the practice of economic statecraft. The US still acts through law and regulation, but its leverage increasingly depends on whether it can align privately controlled systems with public objectives. The result is a form of statecraft that rests less on direct administration alone and more on the ability to steer commercial networks that are global in reach, strategically important, and not fully under its control.
President Trump’s Second-Term Mobilization of the Private Sector
The Trump administration did not create this trajectory, but it has accelerated it, particularly in industries it deems critical to US national security. The private sector now performs four functions that are increasingly essential to how American economic statecraft works: 1. they act as gatekeepers when they decide which transactions can proceed and which stall; 2. they operate chokepoint infrastructure in the systems that make cross-border commerce and technological competition possible; 3. they influence strategy by allocating capital and pricing risk, which helps determine which supply chains and industries remain viable; and 4. in some industries, they are not just intermediaries at all, but are rather the ones building the productive capacity on which US power now depends.
Earlier administrations often treated the private sector as an implementing partner; this administration is more willing to treat private actors as strategic assets central to its strategy. The January 2025 America First Trade Policy memorandum framed trade policy in national security terms and called for reviews of deficits, unfair trade practices, and tariff authorities. The America First Investment Policy memorandum, released the following month, directed the Committee on Foreign Investment in the US (CFIUS) to restrict Chinese investment in strategic sectors and ordered review of broader outbound-investment limits. The point was not simply to block hostile acquisitions or raise costs on foreign producers. It was to shape where capital could go, which sectors it could support, and how market decisions would affect the broader balance of power.
Several cases in 2026 have illustrated this transition. Project Vault, announced in February 2026, showed the private sector in its financing and capacity-building roles. The Export-Import Bank of the US (EXIM) approved up to $10 billion for a new US Strategic Critical Minerals Reserve, with roughly $2 billion more expected from private-sector participants. The structure was designed to align government credit with manufacturers and commodity-market actors in order to secure inputs that markets alone had failed to deliver at sufficient scale. Rather than relying on tariffs or export restrictions alone, the administration used public finance to organize private capital around a strategic vulnerability that markets alone had not solved.
The March 2026 maritime reinsurance initiative in the Gulf illustrated a different mix of functions. The Russian oil price cap had already demonstrated how the state could use private maritime services as an enforcement mechanism, restricting access to shipping and insurance unless firms could document compliance. But after the war in Iran disrupted trade through the Strait of Hormuz, the US International Development Finance Corporation announced a $20 billion Maritime Reinsurance Plan alongside a private sector partner. In that case, private insurers were not primarily constraining trade but helping to restore it. The state provided backing, but commercial actors supplied the risk-bearing capacity needed to reopen a vulnerable trade artery. That made the private sector not just an enforcer of rules, but an operational stabilizer during a geopolitical crisis.
The Price of Steering Private Power
An implication of this shift is that the US is developing a more interventionist relationship with private markets that it has traditionally avoided. American power has long depended in part on the openness and credibility of private systems operating at global scale. Under the second Trump administration, the government is not merely setting broad rules and leaving firms to respond, but more openly trying to direct capital and production toward strategic ends, marking a real departure from the older American instinct to treat markets as relatively autonomous. That may strengthen the government’s hand in strategic competition, but it also pushes the US toward a model in which state power is exercised more directly through private markets. The risk is not only macroeconomic inefficiency but weakened credibility of its private sector.
The business implications are just as significant. Geopolitical risk is no longer confined to a narrow group of clearly sensitive industries. It is spreading into sectors that firms once treated chiefly as commercial infrastructure or business services, including cloud infrastructure, data centers, logistics software, port equipment, maritime insurance, and battery supply chains, but that are now increasingly viewed through a national-security lens. That changes the investment calculus, and some firms will avoid these sectors rather than operate under growing strategic uncertainty; others will stay, but only if returns increase enough to justify the risk that their commercial decisions may be constrained by rapidly shifting government policy. Over time, that means the most strategically important industries may face a higher cost of capital precisely because they have become strategically important. Government support may crowd capital into selected projects by improving downside protection or enhancing expected yield, even at the cost of a deteriorating fiscal situation, but that does not necessarily eliminate the wider deterrent effect on investment if investors conclude that sector-level exposure to state direction has increased and that managerial control over capital deployment and market access has correspondingly declined. As investors raise required returns to compensate for that added uncertainty, a smaller share of projects will meet hurdle-rate thresholds on a risk-adjusted basis, reducing the set of financeable investments and, in turn, constraining the flow of capital into the sector. This creates a more politicized investment environment in which firms have less confidence that commercial logic will govern commercial outcomes.
The broader geoeconomic consequence is that the US may become more powerful in the short term while making its own system less attractive in the long term. Washington can gain real leverage by steering the private infrastructure around finance, technology, and trade. But every time those systems are used more aggressively for strategic purposes, businesses, investors, and foreign governments are reminded that access to them is not neutral. That will encourage hedging, as countries diversify suppliers and payment channels, firms build redundancy into operations once designed for efficiency, and investors apply a political discount to sectors most exposed to state direction. In that sense, the challenge is not simply whether the US can organize private power more effectively than its rivals. It is whether it can do so without undermining the openness, predictability, and trust that gave US private firms their global reach in the first place.
