By Mike Wood
PEACHTREE CORNERS, Ga. | The first Trump Administration, which governed from January 2017 to January 2021, placed a strong emphasis on revitalizing American businesses. Through a combination of policy changes, tax reforms, and deregulation initiatives, the administration sought to foster economic growth, boost domestic manufacturing, and encourage job creation within the United States.
The second Trump Administration continues those initiatives and has added even more.
The 2025 omnibus bill (OBBB Act), passed this year by Congress and signed by President Trump, made permanent the reduced individual and corporate income tax rates which the 2017 bill had scheduled to sunset after 2025. Those favorable tax provisions amount to an indirect investment in American businesses whether they operate as corporations, themselves subject to income taxes, or as pass-through entities whose owners, often individuals, pay income taxes on the passed-through business profits.
In the post-pandemic era, the U.S. economy has recovered much more robustly than the economies of other countries. The recovery has led to increased business profits. So, what to do with those profits? A business might use them to “EAT THE TARIFFS.”
Alternatively, those profits might benefit the federal government more directly.
Some observers see shifts in the relationship between the federal government and private enterprise, which present ways for the government to share in increased business profits. Rather than abrupt takeovers, governmental influence now expands through targeted interventions and regulatory actions that affect operational decisions.
The concept of nationalization—where the government takes control or ownership of private industry—traditionally has been viewed as contrary to American capitalist ideals. However, under the current Trump Administration, several policy decisions and interventions by the federal government look like gradual, or “creeping,” nationalization. Let’s consider two recent examples.
A potential deal with Intel: The Trump administration seeks a nearly 10 percent stake in the computer technology company. The possible agreement would convert about $8.9 yet-to-be paid of $10.9 billion in awarded federal grants, issued to Intel under the CHIPS Act, into ownership equity in the company. Initially, the government would not have voting rights or governance power, and any agreement likely needs approval by Intel’s board of directors, but the deal still would constitute a degree of government ownership.
Potential export taxes on Nvidia and Advanced Micro Devices: The administration has agreed for these chip companies to export a limited range of their artificial intelligence (AI) chips to China. Such chips would not include their most sophisticated AI chips, but Chinese companies or China’s government likely would buy large volumes anyway. In what is essentially an export tax, these companies would pay 15 percent of the revenue from sales of AI chips into China to the US Treasury.
While these deals with US technology companies fall short of nationalizing them, they may constitute the leading edge of “creeping” nationalization of private industry businesses.
Typically, it’s socialist or communist governments that seek partial or complete ownership of private businesses. So, do these deals portend ultimate nationalization?
We will see.
- Have a comment? Click here to send an email.
