Trump Embraces Economic Intervention With Steel, Rare Earth Stakes

Since he took office for the second time, US President Donald Trump has adopted the state’s capitalism with an amazing degree.

He took a file Personal sessionNot even a government share, at a major company for the United States. I have sent the Ministry of Defense to buying Part of a rare mining company. He made plans To reshape American shipbuilding through direct government investment, federal resources directed towards promotion Among the resources such as coal, winners and losers in all emerging industries that will form the global economy in the coming years.

“This is the republican administration that adopts the capitalism of the state in a way that we have not seen for a long time, while all the time excels on” socialism “, and this is not experienced,” said Sarah Bourel Danzmann, a professor at Indiana Bloomington University.

return DirigismeOr state capitalism, not unique to Trump or the United States, of course. Every economy and economic bloc trying to Balance sorting Between the country and the market at a time flowing in new industries, the development of supply chains, and fears of geopolitical and economic competition. Former US President Joe Biden did the same, and the European Union will also do, if it does not have 27 member states to quarrel about what it protects and what to promote – and has money to secure everything.

What makes the Trump gun in a group of state capitalism is that it heads a political party, at least in recent decades, defended the free market above all. Indeed in his Chapter OneHe pointed out that his vision of economic security was ExpansionistWhich means that the government was forced to intervene, which led to a tariff for imports of elements such as steel on the ground of national security. This was transferred to another level in Trump’s second state, with a large number of definitions and protectionist measures not only Steel and aluminum But also on copperCars, quickly wood and medicine.

“The markets control the Republicans until it comes to national security, and the definition of national security has expanded beyond all recognition,” said Powell Danzman. “There is nothing that cannot be defended through the giant national security lens – and this gave Republicans a license to do so.”

The reason Trump is America Industrial policy is re -discovered the same reason that every economy is: the world changes and becomes more accurate. Supply chains were severely tested during the Covid-19s, which led to a series of moves in the United States and other places to reproduce basic medical equipment-some of them from Trump’s first Use From the Defense Production law (DPA), a legacy in the Korean war, was dealing with the epidemic.

DPA, if that Renovated By congress later this year, it is likely to be a Trump administration’s favorite tool to direct government money to the things he wants more; It has already taken Some steps In this direction, such as empowering the Federal Finance Levant, Development Finance Corporation, to enhance local mining projects, and hinted at the use of more DPA authority to direct federal funds to favorite industries.

But there is more. One of Trump’s first executive orders Call “A complete economic and security review of the United States and Industrial base.” Modern economies, especially those that build products such as wind turbines, electric cars and F-35S, adhere to critical minerals, including rare land. The sources of those input will be ideal. The problem – this has been a problem for decades, for both the United States and Europe – is that these critical minerals are largely filled and treated elsewhere, most of them in China. For this reason, the United States spent years, in vain, trying to “cancel risks” and control the critical metal supply chain.

“Now, after the agenda of getting rid of the elimination of raw materials has failed, governments have to make more direct interventions,” said Tobias others, a senior political colleague of the European Council for Foreign Relations. “This is not the wrong conclusion,” he added. “The private sector cannot do it a lot, and price signals are not present. But it may be a risky step.”

Trump is now heading further, the last of which is with a millions of dollars deal that you will see that the Ministry of Defense becomes The largest shareholder in MP materialsThe company that runs the largest-operating and operational mine in the United States. With the support of the Pentagon, the MP materials plan to build a New factory For rare land magnets, which you expect to be launched in 2028. The Ministry of Defense will buy the factory production and establish a floor to help protect the company from Square pricesEspecially since China’s grip on market supplies allows it to pressure competitors.

“What are we?‘Against in rare land industry is Chinese experiences,“ “China is taking advantage of its control and its location as the world‘The largest final market to put prices in a way that reduces investment.“

The same dynamics behind the Trump administration Lurch In the construction of ships directed to the government, such as I put Earlier this year on executive orders. It is a huge problem, if you think a country You must be able To build and repair marine and commercial ships, especially if there is a war looming in the Pacific Ocean. China builds on 200 times Ships more than the United States. It is clear that the market has not provided either ships or shipbuilding basins to the United States: it is a high -cost product that cannot compete with China, Japan, South Korea, or even specialized ship players such as Finland. As with rare land, shipbuilding appears to be one of those sectors in which the market failure opens the door to government intervention. There will be others.

George Clemenco, the former French Prime Minister, is Credit With one saying once That war was “very important that it could not be left to the generals.”

“The economy is very important that it cannot be left to the bankers,” said Gehrke. “The advantages of the West enjoyed in the 1960s, and after that it was not free market miracles. It was the industrial policy in the sixties that put the institutions. Now, we are competing for a completely new group of industries where the winners were not yet clear.

Trick How one goes on this topic. During World War II, the United States wanted to defeat the shipping ships to threaten the German submarine. It’s widespread Construction coup From new shipbuilding ponds and promised to buy all of these Freedom ships Once you float, the American industrial Henry Kaiser left to do the center, such as building ships.

The Biden administration has also made industrial policy. the Law of reducing inflation She was a clean energy, directing government money to attract, enhance and seduce electric cars producers, wind turbines, solar panels and more. It was so statistics that Europe I cried wrong. the Chips and Science Law Make the reproduction of semiconductors a national priority, and He works.

“This is the direction of traveling to global capitalism at this level of development,” said Tod Taker, Director of Industrial Policy and Trade at the Roosevelt Institute.

The disturbing part of Trump’s approach to state capitalism is that he is not completely studied.

His administration solution To friendly Acquisition From the large American steel company by a deep company from the Allied Nation was insisting on “Golden session“An archaeological tail of the struggle of European countries to privatize all the industries that they have nationalized in the post -war years. Trump’s golden share – and then, the US government rules – for investment decisions in the steel company, employee practices, and more. impact Foreign foreign investment in the United States, not in a good way. But at least cheap.

Government control over critical industries was a major part of the privatization campaign in Europe Even below Former Prime Minister Margaret Tischer. But giving veto force on the special decisions that are for the industry, such as whether it should go further towards green steel and mini steel factories, to the president who is Mercuryal at best, appears unwanted, if not disastrous.

“In Trump 2.0, he is trying to find ways to exercise control of the economy without spending a lot of money,” said Taker. The golden session “is the industrial policy of austerity.” “We are likely to see more of these types of future interventions, not benefiting from tax credits as in Biden years, but tools like state -owned companies and national development banks, which were once a kind of side offer but now it is the main event now.”

Pentagon investment In the rare MP materials are a turning point. The company is already Start Fill the gaps in the American supply chain, such as the manufacture of permanent magnets, which are used in all kinds of things from wind turbines to combat aircraft. But there is still the other Obstacles To cross.

If the rare land installed their heads again in commercial conversations with China, then “then”[t]Ashley Zumwalt Forbes, Deputy Director of the United States of the United States for batteries and critical minerals under Biden’s management, said that it does not really appear as a major change in our negotiating site until the deputy begins to present the magnet.

Rare Earth is critical minerals, and there is a lot –at least 50 – The critical minerals needed to maintain the American economy work and flying dies. But building the entire infrastructure, which will be required for a source and processing of rare land, not to mention doing all other things that the Trump administration wants to do, simply through the executive order.

“The permanent magnet is famous for challenges from the point of view of intellectual property, as well as simply from the point of view of knowing production. This is not an industry built in the United States,” said Zumwalt Forbes.

Other countries, and economic blocs such as the European Union, are wrestling with these questions about how to balance the market and the country. China has built its workshops in the world against the background of state -owned institutions, and the state capitalism still gives us trade negotiations. Europe Practically invented This concept, and is still trying to restore the patent.

“The United States plays the role of catching the rest of the world,” said Taker.