Increased Involvement of US Government in Business Operations

The U.S. government has made significant strides in supporting domestic production, with the release of $8.9 billion in subsidies last week for the expansion of U.S. production promised to Intel. This investment comes alongside a 10% stake taken in Intel by the government.

Contrary to previous claims, the U.S. government's shares in Intel will come with voting rights. This move is part of a broader strategy to encourage companies to reinvest in American manufacturing.

Interestingly, Intel had already received $2 billion in subsidies before last week's announcement. The U.S. Trade Ministry, which holds the stake, will be required to follow Intel's proposals in shareholder votes.

Meanwhile, the Defense Ministry has entered the company MP Materials, which operates a rare earth mine in the U.S. and plans to build a second plant for magnet production. The Pentagon is providing support for this venture, aiming to secure domestic supplies of critical materials for military applications.

MP Materials' plans for a second magnet production plant in the U.S. are not the only instance of government support for domestic production. The U.S. government has also acquired a 10% stake in Intel, as mentioned earlier. However, it's important to note that this share does not grant the government voting rights or influence over Intel's future plans.

In a related development, President Donald Trump has expressed a desire to demand counter-performance from more companies for measures taken by the U.S. government. Originally, Trump demanded 20% from Intel and AMD for their semiconductor sales, but the exact terms of these deals remain unclear.

The U.S. government's entry into MP Materials is not the only instance of a "golden share" being used. In a separate deal, the U.S. government has received a "golden share" in the takeover of American steel company US Steel by Japanese rival Nippon Steel. This "golden share" gives the U.S. president the necessary approval for job relocations, factory closures, or large takeovers within the U.S.

Trump mentioned the Intel deal as an example of a deal he wants to secure more of, indicating a broader trend of government intervention in the domestic production sector. He has also stated that company representatives often have to pay if he helps them, suggesting that these deals may not be entirely altruistic.

As the U.S. government continues to invest in domestic production, it will be interesting to see how these deals evolve and what impact they will have on American industry.