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These are two agreements between the US government and a big oil company, Total Energies. They're unusual. They're about two offshore wind farms. One roughly here off the coast of New York and one there off of North Carolina. The previous US government under Joe Biden awarded total the federal leases to both. The Trump administration tried to stop the projects, but the courts prevented it. That's where the deals come in. The US agreed to return the full payments for the two leases some $928 million together with two conditions. Total had to agree not to sue the US and it had to show proof that it's investing the same amount of money, $928 million in oil and gas projects.
A billion dollar refund essentially with clear instructions on where to invest it. All of it outside of court. Whatever you think of offshore wind farms, these two agreements point to a key difference between Donald Trump and the administrations before him. Many have engaged intensely with corporate America, none in the way Trump has. With the midterm elections approaching, we're taking a closer look at the Trump administration's relationship with the business world. We'll examine how the US has become an active investor, an enthusiastic broker of deals, and a rent taker. We'll look at the conflicts surrounding some of Trump's actions, as well as what his version of capitalism means for himself and for the US economy.
Past American governments have also intervened in corporate America. The Nixon administration bailed out the country's largest defense contractor, Lockheed, in 1971. Jimmy Carter extended a massive loan guaranteed to Chrysler in 1979. George W. Bush and Barack Obama used taxpayer money to save GM and Chrysler between 2008 and 2009. In each case, presidents explain their interventions as exceptions to the norm. Yet a generally recognized emergency situation. Tad De Haven is an analyst at the Kato Institute, a Washington think tank that advocates free market capitalism.
Generally speaking, you could everybody was pretty on board that there's trouble, right? The US is in large part a market economy, meaning the market sets prices and production based on supply and demand. Companies are free to decide where to invest. When the government intervenes, it commonly activates levers in the markets to steer consumer or business behavior. They can include tax incentives, grants, subsidies, and loan guarantees. Also, tariffs, which encourage domestic production by raising import prices, and production is often a goal of these levers. For example, US oil and gas industries receive subsidies to make production more attractive, including tax credits and lowcost federal leases. The
US pays high subsidies to farmers to grow corn for food, as well as for ethanol, a bofuel. In both cases, the aim is higher production. Tools like these are typically approved by Congress, which controls the budget in the US, and their use is highly political. There's disagreement over subsidies for oil as well as for corn. Government interventions meanwhile have been on the rise. I think you know the uh the big wakeup call of course was the pandemic.
Suji Shiva Kumar is an analyst at the center for strategic and international studies in Washington. when we realized that our supply chains uh all you know we were o overly vulnerable to China in terms of even basic u you know equipment to protect against uh you know um for masks and you know other non-critical what appeared before as non-critical uh you know supplies the Biden administration turned to market incentives to rebuild some of those supply chains it signed major bills to encourage the production of semiconductor chips and climate technology. In both cases, legislation passed by Congress and with an eye toward China.
There's an increasing uh consensus within the American economic system of the need for the US government uh to take a more active role in shaping uh and controlling uh the direction of the American economy. William Hinnegan is a research fellow at the Council on Foreign Relations and particularly in sensitive uh technologies and products and services and capabilities. Uh the role of the state is increasingly important uh given the intense geopolitical competition with our largest adversaries. Past presidents have also acted without Congress. George W. Bush used rescue funds for banks to support the car industry in 2008. Barack Obama continued that work. Joe Biden placed a 100% tariff on Chinese electric vehicles to
encourage US production. In one sense, the Trump administration is just continuing what others began, intervening in markets for strategic reasons, alone if necessary. So, what makes it so different from the others? Let's start with this company, Intel. The chipmaker was a household name from the PC boom in the 1990s. Recent years have hit it harder. Its struggles attracted the Trump administration, which purchased a 10% stake in 2025 for $9 billion. And Intel isn't alone. The Trump administration has become an unusually active investor. It's assembled a portfolio of stakes in various companies and projects, some public, many still private. Equity stakes like grants inject capital
from the government and in this case without an ownorous application process. The White House says its investments encourage key sectors in the economy especially in areas dominated by China and equity does send a very clear signal of government preference. But for individual companies advocates say that can indeed have value like with Intel. Basically, Intel uh is yes a private corporation but it also represented a whole network of uh you know knowledge networks you know supply chain networks production networks that were sort of below the surface think of it as a root system in a sense and so allowing Intel to fail would al and that root system is not only of benefit to Intel but it's
bly beneficial to the US semiconductor industry if you look at Intel its fortunes have turned round. By September, shares had improved more than 300% in value since the government climbed in. It struck a new deal with Nvidia as well as a preliminary deal with Apple on producing chips. In other words, the government signal does appear to have helped lift the company. And that's what worries to Haven and others. The government involvement could actually begin to mask fundamentals in a company. You don't want that situation where the government moves from a neutral referee and it's already not neutral in a lot of ways. But this is a big difference where you're really putting the thumb on
the scale. Government stakes raise other questions like long-term strategy. Does the US want to become a majority stakeholder and dictate the company's direction or does it want to be a passive shareholder there for stability? The Trump administration's go it alone approach also stands out. The White House has reinterpreted some laws for its own purposes. In the case of semiconductor companies, purchasing shares with money that was envisioned for grants and loans. Critics say that reduces transparency. The reason for focusing on one industrial sector may be clear, but the reason for picking one company over another less clear. Take critical minerals, which are used in batteries or electromagnetics critical
for defense. In July 2025, the US military bought a 15% stake in a company called MP Materials. It's the only active miner of rare earth minerals in the US and is expanding into magnet production. Several months later, the US Department of Commerce announced it would take a $50 million stake in a similar company, Vulcan Elements. The Pentagon also provided the company with a major loan. Like MP Materials, Vulcan Elements is an American producer of rare earth magnets with one big difference. The company is backed in part by the venture capital firm 1789 Capital and one of its partners is Donald Trump Jr. In May, investigative outlet ProPublica linked the loan decision to instructions from the White House.
I can't say that there's a direct connection, but the mere appearance of it points to a corruptive process and a process that erodess trust and faith in institutions. The US military later announced an equity deal with another company backed by 1789, Saquantum, a quantum computing firm. And it's reported to be considering deals with drone companies, including one where Donald Trump Jr. is both investor and board member, Unusual Machines. The White House's go-al alone approach is central to its relations with business. Trump sees himself as a dealmaker and a master negotiator, someone whose administration can broker deals directly with companies. He announced the $500 billion Stargate
initiative between OpenAI, SoftBank, and several other companies. He organized the transfer of Tik Tok's American arm to a company in the US. And he actively mediated in negotiations with Japan's Nepon Steel to buy US steel. Trump is hardly the first president to encourage or organize corporate deals. During the Great Depression, Herbert Hoover urged auto industry titan Henry Ford to save a crashing bank in Detroit. George W. Bush's Treasury Secretary Henry Pollson pressured JP Morgan to take over the failing Bear Sterns. He did the same with Bank of America, which acquired Meil Lynch.
Biden even intervened on the Nepon Steel takeover before Trump entered office, blocking it on national security grounds. That itself a highly unusual move. I think every president uh in the last 50 years has tried to broker deals to the advantage of the United States. It's one of the fundamental roles of the presidency and it's one of the uh instruments of power that the White House can exert. But critics say that Trump's dealings are fundamentally different. If you look at the uh the Trump administration and how it conducts business, I mean, we're talking about a president that called up Coca-Cola and said uh you know, you need to start using cane sugar in your products. So, uh, even without the equity stakes, we
already have a situation that's that's emerged under the second Trump administration where he has, uh, made no bones, has held back in really no way with attempting to use the different tools at the disposal, the executive branch, to favor and disfavor, punish, and reward. One family that's done well under the administration is the Ellison's. Larry Ellison is reportedly one of Trump's biggest financial backers. According to the Wall Street Journal, he donated $45 million to a nonprofit supporting Trump's election in 2024. His fortunes have risen during the Trump presidency. His company Oracle is part of the Stargate project. It's inked deals to build AI data centers in Saudi Arabia, which Trump announced. US
company now running Tik Tok in the US, also Oracle. The Ellison's are connected to another deal involving the government, the sale of Warner Brothers Discovery to Paramount Sky Dance. The family is the largest shareholder of Paramount Sky Dance, where son David Ellison is the CEO. When Paramount's rival Netflix struck first and threatened to inc a deal with Warner Brothers, Trump briefly weighed in, saying the takeover could be a problem. Netflix ultimately pulled out. Another big problem with the president brokering deals is that it puts unusual pressure on companies. Businesses all have business before the government. So what do they do when the government starts telling them how to run their
operations? Can they afford to say no? Wall Street often punishes or rewards a business based on its standing with Trump. Look at Tesla, whose shares plummeted when Elon Musk and Trump traded Barbs in 2025. or Intel, whose shares dropped when Trump criticized its CEO and then rose again when he praised him. And Trump's demands can be arbitrary. He even called for Microsoft to fire a newly hired executive because she previously worked in the Biden Department of Justice. Where I think the president, the current president of the United States steps beyond the norms of uh dealm is that he uses the uh instruments of the state to pressure individual firms and people uh to uh achieve certain policy
objectives which may or may not uh you know in his view be uh in the interest of the United States or of his uh you know personal gain or uh the interest of a sort of non- consensus set of uh views about the future of the state and the American economy. There's another equity stake the US is reportedly considering taking 5% of open AI. It would be a big deal worth about $43 billion just based on the company's latest valuation. And the president says he's considered stakes in other AI companies. And that fits into the broader tendency of the administration to extract revenue. It's put fees on licenses for Nvidia and AMD to export sensitive computer chips to China. It negotiated a $10 billion fee from the Tik Tok
approval. That's according to the Wall Street Journal. And it raised the price of H1B visas, commonly used by the tech industry to hire workers from abroad to $100,000 each, though a judge later struck down that decision. In each case, the US leans on its role as regulator to exact a fee or take a rent. But arguably the biggest source of rents are the tariffs. Remember, tariffs can be a market-based lever for encouraging local production. Trump's tariffs have another role, making money, a fact that Trump has not been shy about. Tariffs are about making America rich again and making America great again.
His administration boasted bringing in hundreds of billions of dollars in the first year alone. A Supreme Court ruling cut that first effort short, but the administration has since put new tariffs into place. Revenue generation has become a key aspect of Trump's interventions. And yet, his exact plans with the revenue are still a puzzle. Reports link the Open AI stake to another one of Trump's wishes, a sovereign wealth fund. Basically, a pool of money for the government to invest.
He's not interested in having a fund created where Congress puts in guard rails and an independent board and all this other stuff. He wants to control it. Trump has talked in the past about replacing income taxes or paying down the US debt with revenues from tariffs. But experts say that's unrealistic. This administration, this president doesn't know anything about the federal budget or spending or the revenues. how you know he doesn't know that $36 billion if you sell Intel tomorrow buys you about a half day's worth of federal spending for the year.
Investor, broker, rent taker. The Trump administration stands out in its approach to corporate America. Past US governments have taken stake in companies, forced mergers and broker deals, and they've deployed tariffs on imports. But their interventions have generally been rare. their efforts typically marked by exchange with Congress. And it's that lack of exchange that distinguishes Trump. Rather than being at odds with Congress, he just hasn't given it much regard. His administration ignores concerns over conflicts of interest, and it sets up its own means of revenue, going around Congress to create new tariffs
regimes. Each of those steps taken intentionally. I think the question we're asking is what's the line between a uh autocracy and a democracy? An autocratic leader and a democratically elected president. A democratically elected president is constrained by the laws, rules, and norms of the United States and the United States government. Uh an autocratic leader with a democratic mandate is one who operates uh from an enforcability standard of law and uses the uh instruments of the state to achieve desired outcomes at the expense of the uh laws and constitutional protections that are in place uh to prevent people who are in positions of immense power from extracting uh the types of outcomes that they want.
Experts say the problems arising from this are more than just ethical. They affect business confidence and how the nation functions. Not that long ago, we interviewed Nobel Prize winner James Robinson on his book, Why Nations Fail. Its thesis that it's institutions that build trust among citizens. Trust is binary, which is to say it will be there until one day that it's gone and then it will be gone in an aggressive and uh almost immediate um fallout, which will have devastating economic consequences for the United States. Trump's interactions with the economy and American companies, by contrast, appear to be built on the impulses of one person. The constant threats, the bullying, uh the attempts to use the federal government's
independent agencies to punish and reward, it's all part of the same package. It's all government by deal. It's government by transaction. At the end of the day, it's about u maximizing and leveraging the American uh the president's power over the American economy. Remember the pair of agreements we started with? Two deals for Total Energies to reinvest almost a billion dollars from wind projects. Total has said it will use the money for an LG project in Texas, a project it had actually already committed to months before the deals. In other words, there's no new investment, just a nearly $1 billion payment.
