U.S. Government Stakes: A New Chapter in Corporate-Government Relations

U.S. Commerce Secretary Howard Lutnick has publicly defended President Donald Trump's strategy for the federal government to acquire stakes in companies it interacts with, especially within the defense industry. Lutnick, speaking on CNBC, highlighted discussions within the Pentagon focusing on financing munitions acquisitions.

On Monday, President Trump advocated for increased government investments in strong American companies, despite criticism suggesting that such interventions could hinder corporate strategy and flexibility, as well as affect consumer impact. The administration recently acquired a nearly 10% stake in chipmaker Intel and facilitated the purchase of U.S. Steel by Japan's Nippon Steel.

The government has also secured a stake in rare earths company MP Materials and negotiated agreements with chipmakers Nvidia and AMD to extract a percentage of revenues from Chinese sales, previously restricted. Lutnick emphasized the dialogue between company CEOs and the U.S. president on policy amendments influencing such deals.

(With inputs from agencies.)