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Days after the Trump administration announced that the U.S. had taken a 10 percent stake in the struggling American chipmaker Intel, President Trump and his advisers had said that similar deals with more American companies and industries may soon follow. While Trump officials like Commerce Secretary Howard Lutnick have tried to justify the Intel stake on national security grounds, they and Trump have also tried to sell it as a great business deal that will generate a return for the country. The dramatic private-sector intervention — and the prospect of more to come — has generated a lot of confusion and criticism, including accusations that Trump is now abandoning free market principles and embracing socialism. Here’s a look at some of the analysis and pushback.

What happened with Intel?

As a primer, per the Wall Street Journal’s sweeping account of how the U.S. 10 percent stake in Intel came to be, it all started a few weeks ago when Trump launched a surprise attack on new Intel CEO Lip-Bu Tan, accusing him of ties to China’s military and calling for him to resign. That sent the company into a panic and prompted Tan to rush to the White House, where he was able to convince Trump he wasn’t a spy and that the U.S. needed to support Intel:

[T]he truce came with a cost: In return for Trump’s support, the administration proposed taking an equity stake in the company. It decided to convert nearly $9 billion in grants—promised to Intel as part of the 2022 Chips Act—into a 10% equity stake in the company, an unusual arrangement that makes the government Intel’s biggest shareholder.

The meeting was the pivot point in a frenzied period for Intel, once one of America’s most venerated technology companies, now stuck in a yearslong downward spiral. The company’s scramble to control the fallout from the president’s demand that Tan step down—triggered by a Fox Business Network segment—underscores the unpredictable environment major corporations face under Trump.

By the end of the two-week roller-coaster ride, Tan’s job appeared to be secure and the company’s situation more stable. Japan’s SoftBank Group agreed to invest $2 billion, seeking to curry favor with Trump. On Friday, Intel and the White House officially revealed the terms of the deal.

As to what Trump and his advisers were thinking, here’s what Politico reported last week:

Trump’s allies say U.S. economic policymaking was in desperate need of a jolt from the top down. Low unemployment, steady growth and surging corporate profits weren’t enough to generate much confidence in President Joe Biden’s leadership. Perceptions of Trump’s prowess as a dealmaker had burnished the public’s view of his economic stewardship during his first term. The White House is now leaning into that *Art of the Deal,*uber-capitalist image as Trump flexes his authority over businesses. …

In Trump world, there’s a view that a potential Intel acquisition and other private dealmaking are one-off transactions aimed at shoring up industries deemed critical to national security. The administration has been exploring strategies to capture returns from the government’s largesse since shortly after the inauguration. That thinking informed Trump’s executive order to Lutnick and Treasury Secretary Scott Bessent in Februaryto form a sovereign wealth fund.

On Tuesday, Lutnick suggested defense sector companies could be next.

‘This is socialism’

Free-market conservatives, or at least the ones who aren’t remaining quiet to avoid Trump’s wrath, have been speaking out against the intervention. In a representative example from last week, conservative pundit Erick Erickson fumed about the looming Intel deal on his radio show, per Mediaite’s transcript:

[Y]ou want ten percent control of Intel in exchange for money the government already promised to give them? That’s socialism. You may be comfortable with socialism. You may decide you like socialism because someone from the Trump administration wants socialism, but my God, people, what have we been fighting for for the last decade?

…

You should let Intel fall flat on its face for having a bad business decision and let the creative destruction of the marketplace pick them apart. Let other companies buy up their pieces or let them regroup.

A government bailout—you know what this does is it causes a distortion in the marketplace, something called the moral hazard, where more and more companies realize they can take extraordinary risks and fall flat—irresponsible risks, not extraordinary risks, irresponsible risks—and the government will just say, “Well, give me ten percent of your company and I’ll make you right.” This is a horrible precedent. This is socialism.

Welcome to state capitalism

In a Financial Times op-ed, AEI Director of Economic Policy Studies Michael Strain argues that even if Trump isn’t being strategic and just impulsively grasping for deals that look good, he’s establishing a dangerous precedent — and now effectively following China’s lead:

The severe flaws in China’s model of state capitalism are becoming more apparent by the month, with its overcapacity, empty industrial parks, struggling housing market, weak consumer demand and deflationary pressure. It is tragic, then, that so many in Washington seem to believe that the best way for the US to compete with China is to become more like China, with the government playing a large role in shaping the composition of investment, industry and employment.

New York Times columnist Bret Stevens is similarly alarmed, noting how the new precedent could come back to haunt Republicans:

If a Democratic president did this to Tan or any other American chief executive, Republicans would call it a political shakedown, an assault on capitalism, a loser for taxpayers. They’d be right.  …

Republicans now cheering Trump for his daily Big Dog performance should at least wonder what the consequences for America’s economic freedom and competitiveness will be once he makes America statist again. Trump’s personalized control of ever-broader swaths of the economy based on ever-thinner pretexts is the beginning of a long trend with neither a political check nor a limiting principle.

Especially since ever-greater government control of private enterprise is usually a progressive goal, not a conservative one. A current of neosocialism now runs through parts of MAGA land, particularly among those who confuse Catholic social teachings with economic reality. This crew should remember that in democratic politics, two can play the game. What the Trump administration did to “60 Minutes” could be done by a left-wing administration to Fox News or Newsmax. And what Trump is doing with Intel could soon become a template for dozens, if not hundreds, of U.S. companies in which Uncle Sam demands a golden share.

The political risks are business risks

The Cato Institute’s Scott Lincicome warns in a Washington Post op-ed that the Intel deal and others like it could wreak all kinds of havoc:

The most immediate risk is that Intel’s decisions will increasingly be driven by political rather than commercial considerations. With the U.S. government as its largest shareholder, Intel will face constant pressure to align corporate decisions with the goals of whatever political party is in power. Will Intel locate or continue facilities — such as its long-delayed “megafab” in Ohio — based on economic efficiency or government priorities? Will it hire and fire based on merit or political connections? Will research and development priorities reflect market demands or bureaucratic preferences? Will standard corporate finance decisions that are routinely (and mistakenly) pilloried in Washington, such as dividends or stock buybacks, suddenly become taboo? …

He adds that the damage could be industry-wide:

The risks of the government’s Intel investment extend well beyond a single company. Other U.S. technology firms might now feel pressured to purchase Intel products, not because they represent the best technology, but to curry favor with or avoid being targeted by an administration that has a direct financial and political interest in Intel’s success.

Should Intel continue to falter, the government might intervene more directly in these transactions, for example by withholding tariff relief or export licenses until U.S.-based companies agree to put “Intel inside.” Recent Trump actions, such as demanding a 15 percent government cut of chip sales by Nvidia and AMD to China, show this possibility is more than a mere hypothetical.

Intel has expressly stated that its foundry business — the one in which the U.S. government is now extra-invested — depends on finding customers, and now, Trump has a strong, and political,incentive to find them. Overall, this dynamic could lead to bad technology choices by private U.S. firms, ultimately weakening the United States’ long-standing tech dominance in global markets.

There are also risks for Intel’s U.S.-based competitors, who might find themselves at a disadvantage when vying for government contracts or subsidies, winning trade or tax relief, or complying with federal regulations. Private capital might in turn flow to Intel (and away from innovation leaders in the semiconductor ecosystem) not for economic reasons, but because Uncle Sam now has a thumb on the scale.

What does this mean for the once free-market obsessed Republican Party?

Bloomberg columnist David M. Drucker is trying to figure that out:

Whether we call it socialism or big-government populism, many Republicans in Congress were raised to be suspicious of this sort of federal intervention in the American economy. But fearing a backlash from Trump-supporting GOP primary voters in the midterm elections next year, they have been silent enablers of the president’s industrial policy. That raises a question: Why are Republican voters content to let Trump pursue an agenda they most assuredly would have rebuked had a Democrat done the same (recall the Obama-era outrage over Solyndra)?

I put that query to Tim Chapman, a veteran Republican operative in Washington who advises Mike Pence, Trump’s first vice president and a stubborn acolyte of GOP icon Ronald Reagan. Chapman, a keen observer of center-right voters both before and during Trump’s reign atop the Republican Party, attributed their willingness to permit Trump philosophical heresies to three factors.

“At the most basic level, the party is strongly supportive of President Trump and his agenda and so there’s an inclination to give him the benefit of the doubt,” Chapman said. “The second thing that’s going on is, there’s been this fascination within Republican activist circles for decades with this idea that we should just run the federal government like a business.” In that regard, Chapman explained, voters view Trump’s coercion of corporate America as the normal process of “cutting deals” that fits with running Washington like a business.

“There’s a third and much more pernicious element,” Chapman added. “There are serious elements within the Republican Party that want to throw out the old conservative gameplan. ‘State power conservatives’ is what I’m calling them. These are conservatives who say: ‘The old ways of approaching government and of approaching public policy failed us for decades and therefore we must be open to new ways.’” That “new way,” Chapman emphasized, wields government power to “achieve conservative ends,” currently “defined by whatever” Trump wants.

No, this isn’t socialism at all

In a Substack post republished by Jacobin, Carl Beijer completely rejects the idea that Trump’s Intel deal is socialism, noting that the government’s “passive ownership” of a fraction of Intel falls far short of what socialists would seek:

While socialists may share certain egalitarian values and other priorities with contemporary Democrats, American liberals are still reflexively ambivalent-to-hostile towards the basic socialist agenda of nationalization. They will opportunistically support it when it is time for Democrats to bail out the economy, but then they will aggressively attack it if they think this will score points against Republicans. There are few things that contemporary liberals enjoy more than “catching” a Republican doing something that they can, rightly or wrongly, construe as socialist.

In this case I would say wrongly. Stengel’s definition of Marxism as “state ownership of the means of production” is confused for all kinds of reasons, but here the most salient is that ownershipdoes not imply control. Even if this was ordinary equity, 10% would hardly give the government any kind of significant control over the company. But as Intel made clear in a statement, this deal doesn’t even give the government 10% control[.] …

This notion of “passive ownership” perfectly illustrates why socialists would do well to talk about controlrather than ownershipof the means of production. A major function of modern finance is to sever the relationship between the two. To identify control, you have to look past the legal / business terminology and figure out who actually has the final say over any given lot of capital.

In that light it isn’t clear that a 10% ownership stake even represents incremental progress towards control of Intel. Convincing a business to give you a 10% non-voting stake in their company is a very different thing from getting a 10% voting stake, let alone a 51% voting stake.

MAGA now means mega government

At the Atlantic, David Graham argues that “the era of small government is over”:

In his second term, [Trump] is embracing perhaps the most sweeping expansion of federal power since that of Franklin D. Roosevelt: bullying state governments, using military force if necessary; telling private institutions, including media corporations and universities, how to operate; extorting law firms into doing free work for the government; and, in the latest escalation, taking a stake in the tech firm Intel.

For decades, the American right and the Republican Party held themselves up as the defenders of individual citizens, corporations, and state and local governments against intrusive control from Washington. But where Ronald Reagan joked that the nine most terrifying words in the English language were I’m from the government, and I’m here to help, Trump’s credo is “I’m from the government, and I’m here to take over.” The debate in America is no longer about whether socialism can gain a foothold. It’s whether the socialism that dominates will be progressive or right-wing.

He notes that Trump is simultaneously gutting the government while greatly expanding its grip on both the public and private sectors:

Paradoxically, Trump is also shrinking the federal government’s footprint, as measured by headcount and agencies. He’s closed or sought to shut down USAID, the Education Department, and the Consumer Financial Protection Bureau, and has fired or bought out hundreds of thousands of federal employees; the exact number is difficult to know because of unresolved litigation and the administration’s opacity. Yet even as he shrinks the size of the government, he is expanding its role into new and unprecedented areas. And the pace of government spending continues to rise, in part because of ill-conceived “efficiency” cuts.

The result is a government that is less effective at providing services, more expensive, and more intrusive. This is just the nightmare that right-wing politicians and thinkers have been warning about for a century, and now their party has made it reality.

This is what fascists do, too

The New Republic’s Timothy Noah argues that Trump isn’t practicing democratic socialism, he’s practicing fascist corporatism:

This is a president searching under the sofa cushions for every nickel he can find because he just passed a tax cut for the rich that will double the budget deficit. That’s why he keeps imposing random tariffs; it’s why he’s shaking down Ivy League universities; it’s why he wants to sell rich foreigners $5 million “gold cards” to live and work the United States; and it’s why he’s threatening to impose a 1-5 percent tax on all proceeds from inventions for which the United States furnishes a patent. (Inventors already pay thousands in onetime fees to secure patents.)

Converting a CHIPS grant to Intel into equity has a certain appeal, because, sure, the taxpayer should get some return on his investment. But it introduces all kinds of tricky questions about how, over the long term, you regulate a business owned by the government. …

Then there’s the question of legality. A democratic socialist is supposed to pursue socialist goals through democratic means. Trump does not. We-the-people never gave Trump the power to tinker with the CHIPS Act to this extent without passing additional legislation. It isn’t clear whether Trump has the unilateral power to claim a golden share in U.S. Steel, either, or to charge a 15 percent commission on chips sales to China, or to buy a 15 percent stake in a rare-earth minerals company. Indifference to constitutional procedure is characteristic of fascist regimes.

Also, there’s the matter of personal indebtedness to Trump. The president is imposing loyalty tests on 553 corporations, and the loyalty he requires isn’t to the United States, but to Trump himself. The language of the golden share deal with U.S. Steel mentions Trump by name, which seems an open invitation for Trump to exploit his power over that corporation for personal gain.

“Regulation by personal whim is characteristic of fascist corporatism,” Noah concludes. “Another characteristic is that the business community allows fascists to acquire strength under the delusion that it can appease them.”

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