The Donald Trump administration seems to be eyeing America’s top defence giants for a stake after it struck a deal with Intel last week. The US government is evaluating potential ownership stakes in defence industry firms, including Lockheed Martin Corp, US Commerce Secretary Howard Lutnick has said.According to a Reuters report, Lutnick confirmed this development on Tuesday whilst supporting President Donald Trump’s initiative for increased government involvement in American industry.“They’re thinking about it,” Lutnick told CNBC, citing Pentagon leaders, when asked if the administration was considering taking pieces of contractors such as Lockheed Martin, Boeing, or Palantir Technologies.Last week, the Trump administration revealed it had acquired nearly 10% ownership in the semiconductor manufacturer Intel.The US government had earlier stepped in to finalise Nippon Steel’s acquisition of US Steel in June, securing what Trump referred to as a “golden share” that provides Washington control over its functions.
US to buy stakes in Lockheed Martin, Boeing?
A significant debate has emerged regarding defence procurement. According to Lutnick, Lockheed Martin derives 97% of its revenue from US government contracts, effectively functioning as a government extension.“There’s a lot of talking that needs to be had about how do we finance our munitions acquisitions,” Lutnick saidLockheed Martin, whose shares increased by 1.7%, issued a statement confirming their ongoing positive collaboration with President Trump’s administration to enhance national defence capabilities.Boeing’s shares rose 2.1%, and Palantir’s stock, after an initial minor decline of approximately 1%, demonstrated a 1.7% increase during New York’s midday trading, the Reuters report said.The comments represent another instance of unprecedented White House involvement in private industry, with interventions typically reserved for wartime scenarios or for protecting crucial domestic enterprises during economic difficulties.Recently, the Trump administration also acquired ownership in MP Materials, a rare earths firm, and facilitated an agreement with Nvidia and AMD requiring them to share 15% of their revenue from Chinese sales of previously restricted chips.During his Monday address, Trump expressed his intention to increase government funding in robust American enterprises, despite concerns from opponents who suggest such governmental involvement could restrict business flexibility and market responsiveness, whilst raising questions about consumer implications.The extraordinary degree of federal government involvement in economic matters has led to surprising collaborations, including liberal US Senator Bernie Sanders supporting the investment in Intel.On Tuesday, Lutnick said that organisations seeking federal aid must be ready to interact with Trump.“If a company comes to the United States of America government and says: ‘We need your help, we want to change everything’ … I think that’s a question between the CEO and the president of the United States of whether he will listen to them and change the rules,” he told CNBC, citing the Nvidia deal.“If we are adding fundamental value to your business, I think it’s fair for Donald Trump to think about the American people,” Lutnick added.
