White House Suggests It’s Coming for Defense Companies Next

The U.S. government took a 10% stake in Intel last week, through a deal that will convert funding from the CHIPS Act into partial ownership of the tech company. But President Donald Trump has much larger plans for his government’s takeover of private industry. At least that’s what Commerce Secretary Howard Lutnick suggested Tuesday during an interview on CNBC.

CNBC host Andrew Ross Sorkin asked Lutnick about whether he thought it was “fair for America” that government was now taking control of Intel. Sorkin brought up other companies that benefit from U.S. government dollars, asking if they were next.

“Why shouldn’t the U.S. government say, you know what, we use Palantir services, we would like a piece of Palantir. We use Boeing services, we would like a piece of Boeing. There are a lot of businesses that do business with the U.S. government—that benefit by doing business with the U.S. government. I guess the question is, where’s the line?” Sorkin asked Lutnick.

But Lutnick thought that all sounded great. “Oh, there’s a monstrous discussion about defense. I mean, Lockheed Martin makes 97% of their revenue from the U.S. government. They are basically an arm of the U.S. government,” Lutnick said.

Government takeover?

The Commerce Secretary went on to praise the technology that Lockheed has developed, describing the “amazing” technologies that can “knock a missile out of the air” if it’s coming toward you.

“There’s a lot of talking that needs to be had about how do we finance our munitions acquisitions,” Lutnick said. “I think a lot of that is talking and now you have the right people in the jobs, and Donald Trump at the head, thinking about what is the right way to do it. I tell you the way it has been done has been a giveaway.”

Lutnick has previously insisted that the government has no governance role at Intel and isn’t going to tell the company what to do. But Trump tells private companies and institutions what to do each and every day, trying to use his leverage to influence policies right down to who can be hired at universities and what they can teach.

Trump also used an interesting word when posting to Truth Social about the Intel stake: control.

“It is my Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote on Truth Social.

There is clearly an understanding that U.S. government ownership comes with strings attached. Trump was never going to get a stake in a private business without some form of control.

Don’t call it a sovereign wealth fund

Another CNBC host asked Lutnick about a U.S. sovereign wealth fund and whether there would be some kind of independent government board to oversee these investments. But Lutnick rejected the idea that what was happening resembled a sovereign wealth fund like those set up in countries like Saudi Arabia.

“Well, let’s be clear. There’s no sovereign wealth fund now,” Lutnick said defensively. “We’re not spending the American taxpayers dollars on anything, right? Biden gave away $11 billion and Donald Trump took back, right? An equity stake for the money that Biden had given away. We’re not starting a sovereign wealth fund.”

Lutnick insisted that it should be called an “economic security fund” and would be coming from other countries that have supposedly pledged spending money on manufacturing infrastructure in the U.S.

Communism or something else?

Many online discussions about Trump gobbling up shares in private companies have tried to make comparisons to socialism or communism, but that’s not quite right. The path that America is currently going down is better called something like corporate statism.

Under communism, the theory is that the state owns the means of production and the wealth created is dispersed more evenly among the people. Under corporate statism, businesses and government are deeply integrated, but the ruling class keeps all the profits for themselves and everyone else just has to do their best selling their labor to make a living.

Lutnick was explicitly asked about China’s system and what he would think if another country, like the UK, decided to start taking stakes in companies with a “China-like approach.”

“The British figured out, along with the Trump administration teaching them, that you need steel to be a real country to be able to defend yourself. And the British figured that out, they nationalized British steel,” Lutnick said.

Not very conservative, is it?

Whatever you want to call this new system, everything about it still feels very new right now, even if the ruling class still had an outsized say in how government is run. And while some conservatives in the comments section of the Wall Street Journal might object, it seems clear the nation’s wealthiest people have embraced Trump’s idea for the future of the country.

Mark Cuban, a nominal “liberal,” at least by billionaire standards, may have spelled it out best on Bluesky this past weekend. Asked about what was happening at Intel, which one user described as a shakedown, Cuban made clear that he preferred paying Trump over whatever wealth tax progressives might hypothetically impose if they came to power.

“I’m the furthest from a Trump fan. But the reality is that he would have to shake very hard to equate to the shakedowns of the unrealized cap gains tax and warren’s tax that were proposed,” Cuban wrote.

None of that is a surprise, obviously. We’ve seen that calculation since the day Trump was inaugurated, when the biggest names in tech not only showed up for the festivities but sat in church with the president.

Trump’s plan for income taxes

“So I think the key is where is the United States of America adding fundamental value to your business?” Lutnick asked on CNBC. “If we are adding fundamental value to your business, I think it’s fair for Donald Trump to think about the American people.”

To be clear, Trump isn’t thinking about the American people. He’s thinking, as always, about himself and what’s best for Donald Trump. And these kinds of deals are almost certainly part of the president’s larger plan to move away from a model where government revenue is generated by income taxes and instead comes from things like tariffs and government ownership of industry.

A flat tax has been the right-wing dream for decades, though it would be highly regressive, meaning that wealthy people would pay a smaller percentage of their income in such a system. But that feels like the road we’re heading down with all of those deals. Trump started this with “no tax on tips” and “no tax on overtime.” But he may be lining up a plan for no taxes period if he gets his way, completely realigning government revenues with tariffs and ownership of private industry.

It’s not quite China’s system. But it’s not unlike China, if we’re being honest.