Art Of The Deal: How Trump Is Capturing The Private Sector

The U.S. government is going into business whether businesses like it or not.

President Donald Trump wants to convert $11 billion in federal contracts and subsidies awarded to the struggling chipmaker Intel into an equity stake. The Pentagon is now the largest shareholder in a rare earths mining business. Trump conditioned Nippon Steel’s acquisition of U.S. Steel on his receipt of a “golden share” that grants him significant control over its operations. He has announced plans to slash prices on U.S. pharmaceuticalsand hatched deals that entitle Treasury to a slice of the revenue that Nvidia and AMD generate from Chinese chip sales.

Fromtariff carveouts to pro bono legal work from white-shoe law firms, Trump is exerting power over U.S. businesses in ways that go beyond even Sen. Bernie Sanders’ (I-Vt.) aspirations. His ability to inject his agenda into private enterprises and dealmaking has shaken the guardrails that protect businesses from sudden political shifts and defied the free-market orthodoxy that was a hallmark of Republican economic policymaking.

But Trump’s approach has also created new risks that could divert capital from some of the domestic industries he has sought to promote, from semiconductors to pharmaceuticals. Investors hate uncertainty, and the president’s spur-of-the-moment demands for the government to exert control over private investment could suppress the very market forces that he needs to deliver economic growth.

“The more you politicize business decisions, the less efficient they’re going to be,” said Gregory Mankiw, an economics professor at Harvard University and a former top adviser to President George W. Bush and Mitt Romney. The president’s ad hoc forays into the private sector are “fundamentally inconsistent with free enterprise and the rule of law.”

“It’s really a big step toward crony capitalism,” Mankiw added.

Trump’s allies say U.S. economic policymaking was in desperate need of a jolt from the top down. Low unemployment, steady growth and surging corporate profits weren’t enough to generate much confidence in President Joe Biden’s leadership. Perceptions of Trump’s prowess as a dealmaker had burnished the public’s view of his economic stewardship during his first term. The White House is now leaning into that Art of the Deal, uber-capitalist image as Trump flexes his authority over businesses.

“When you put this money in the hands of Donald Trump, you’re going to get a better deal for the American taxpayer,” Commerce Secretary Howard Lutnick told CNBC earlier this week, describing how the government could flip the subsidies Intel received through Biden’s CHIPS Act into an ownership stake that would provide the government with a taste of the chipmaker’s future returns. “That’s what Donald Trump is.”

In Trump world, there’s a view that a potential Intel acquisition and other private dealmaking are one-off transactions aimed at shoring up industries deemed critical to national security. The administration has been exploring strategies to capture returns from the government’s largesse since shortly after the inauguration. That thinking informed Trump’s executive order to Lutnick and Treasury Secretary Scott Bessent in Februaryto form a sovereign wealth fund.

“Washington, D.C.’s blind commitment to consensus orthodoxy that ignored the realities of the world is exactly why Americans and America were left behind," White House spokesperson Kush Desai said in a statement. "The Administration is simultaneously pushing the free market policies – such as rapid deregulation and The One Big Beautiful Bill’s tax cuts – that do work while rectifying the America Last policies that haven’t worked to safeguard our national and economic security.”

But where the administration sees upside, free market types see peril. Trump’s willingness to wield influence over the private sector has amplified the government’s role in picking winners and losers in regulated markets. That has further scrambled the ability of corporate decision-makers to strategize against an already unpredictable U.S. policy environment.

“If the government can come in and look to support companies, the government has a right to limit your returns,” hedge fund billionaire Leon Cooperman told POLITICO. Jessica Riedl, a conservative economist at the Manhattan Institute, compared the president’s efforts to cap prescription drug prices and buy private businesses to the actions of socialist governments with centrally planned economies.

On Intel, Cato Institute Vice President Scott Lincicome said that reverse engineering government subsidies into government-owned equity would chill the willingness of CEOs to partner with the federal government on future projects.

Lutnick ruled out taking governance rights in Intel, but if the government decides to use any stake it acquires in a private business to exert direct control over its operations — a la U.S. Steel — Lincicome warned that would dissuade outside investment in industries that the administration considers a national security priority. (For the Trump administration, that includes everything from copper and semiconductors to timber.)

Even some MAGA supporters are alarmed. One prominent Trump ally, granted anonymity to speak frankly about the president’s economic agenda, said the possible acquisition of Intel was “bad policy” that could trigger an enormous backlash. Another supporter said the government should stay out of the private sector and focus on deregulation.

It’s notable that Sanders — an avowed democratic socialist whose policies are largely viewed as toxic by the investment world — praised Trump’s designs for Intel. “If microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment,” the Vermont senator said in a statement to POLITICO.

That may bother the Wall Street Journal’s editorial page, or the traditional corporate conservatives who also held their nose at Trump’s protectionist trade and immigration policies. But the president’s hold over the GOP base — and vigilant focus on hammering any outward criticism of his agenda — could limit the public uproar.

Of course, while Trump might be aligned with Sanders on Intel, that’s one of the only areas where their economic agendas overlap. Many of the free-market partisans who’ve been infuriated by the president’s recent dealmaking are also vocal cheerleaders of his tax and regulatory agenda.

In the meantime, prominent business leaders and Republicans who derided previous government incursions on the private sector have already started to change their tune.

“Nothing’s for free in this world,” said John Catsimatidis, the billionaire New York radio station owner, real estate investor and longtime Trump booster. When it comes to Intel, “I agree on this one with Bernie Sanders.”