He didn’t campaign on it. It wasn’t even broached during his first administration. He criticized his predecessor for it.

But this month President Donald Trump made clear that he’s willing to use the full force of the US government to directly intervene in corporate matters to achieve his economic and foreign policy goals.

Trump, backed by his team of Wall Street financiers, took the unprecedented step of seeking to collect a portion of money generated from sales of AI chips to China by Nvidia Corp. and Advanced Micro Devices Inc. And in a move that could see the US government become Intel Corp.’s largest shareholder, the administration is said to be in talks for taking a 10% stake in the beleaguered chipmaker. Last month, the Pentagon also decided to take a $400 million preferred equity stake in a little-known rare earth mining company.

It’s a series of moves that has surprised Wall Street and Washington policy veterans, who privately and publicly acknowledged they’ve never seen anything like it in their decades-long careers. The actions, if successful, could leave private investors and average 401(k) savings holders enriched while catapulting US national security further ahead of China. But they’re also risky bets that could end with taxpayer losses and distort markets in ways investors can’t predict.

“I’m very concerned that we’re going to have these rolling sectors where the president starts saying ‘you have to pay us just to sell internationally,’” Lee Munson, the chief investment officer at Portfolio Wealth Advisors, with $390 million in assets under management, said. “Where does this end? I don’t even know how to buy companies right now that have exposure to China that have high-tech IP.”

The Trump administration’s direct involvement in corporate matters is becoming a marker of the president’s second term. Trump, a self-described dealmaker, has a mixed track record of success yet has vowed to bring more of a business approach to governing in Washington.

In addition to the Nvidia and AMD revenue promise and potential Intel investment stake, his administration secured the “Golden Share” from Nippon Steel Corp., a Japanese steelmaker that gives Trump personal power to make decisions on United States Steel Corp. corporate decisions. In these cases, the administration is picking winners and losers, and risks undermining the free flow of capital.

“The Trump administration’s focus on industries like steel, semiconductors, and critical minerals is not arbitrary – these sectors are critical to our national and economic security,” White House spokesman Kush Desai said in an emailed statement. “Cooled inflation, trillions in new investments, historic trade deals, and hundreds of billions in tariff revenue prove how President Trump’s hands-on leadership is paving the way towards a new Golden Age for America.”

Trump surprised markets earlier this month when he announced Nvidia and AMD agreed to pay the US government 15% of their revenue from AI chip sales to China. The move rankled investors, trade experts, lawmakers and others who feared a much broader slippery slope in which the federal government could begin forcing pay-for-play scenarios in everything from trade negotiations to defense contracts.

Word that the White House is contemplating using Chips Act money to take a direct stake in chip-maker Intel added to the uncertainty around changing norms between private sector companies and the US government.

The move could provide a much-needed boost to Intel’s ambitious plan for a sparkling new chips facility in Ohio, which is vital to rebuilding domestic chip production in the US but which has been delayed amid shrinking sales and mounting losses at the company. SoftBank Group Corp. agreed this week to buy $2 billion of Intel stock in a surprise deal.

‘Chinese model’

In America’s free market economy, the government typically doesn’t buy stakes in companies. There are exceptions, of course, such as during the financial crisis of 2008-2009, when it stepped in to support major names like Citigroup Inc., American International Group Inc. and General Motors Co. While Intel has performance issues to grapple with, it isn’t facing the imminent threat of collapse.

That’s in part why investors, lawmakers, national security experts and others interviewed repeatedly referred to “uncertainty” and “uncharted territory” when asked to contemplate the risks associated with Trump’s new policies.

“It’s state direction that we haven’t had in the US, it’s very much the Chinese model making its way into US government,” Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, said.

The Trump administration’s approach to public companies in the first year of his second term is in some ways an evolution of the economic statecraft tools he deployed in his first four years as president. Back then he deployed trade levers that hadn’t been used in years or decades, from Section 301 tariffs on entire countries, like China, to Section 232 tariffs on sectors like steel and automobiles.

The policies weren’t popular and they rattled markets, but supporters argued that the tariffs tamped down Chinese and other foreign products that flooded the US market and drove some American companies out of business.

Trump has continued to push the boundaries of using novel tools in his second administration.

“What we see here is when it comes to big economic questions like tariffs and fees for exports and also the MP Materials deal, he is willing to push legal boundaries on big economic issues in a way that he wasn’t in the first term,” said Peter Harrell, a nonresident scholar for the American Statecraft Program at the Carnegie Endowment for International Peace.

Caitlin Legacki, a former Commerce Department official in the Biden administration, said an argument in favor of “national champions” is understandable, however a “lack of transparency” around the deals in concerning.

“Instead of making this a cause for national security or technological independence that people from both parties can rally around, it feels more like a shakedown,” she said.

(With assistance from Josh Wingrove and Ryan Gould.)

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