U.S. Commerce Secretary Howard Lutnick on Tuesday defended President Donald Trump’s push for the federal government to take stakes in U.S. companies it does business with, saying it could move into the defense industry.
“They’re thinking about it,” Lutnick told CNBC, citing Pentagon leaders. “There’s a lot of talking that needs to be had about how do we finance our munitions acquisitions.”
“There’s a monstrous discussion about defense. Lockheed Martin makes 97% of their revenue from the U.S. government. They are basically an arm of the U.S. government,” he added.
On Monday, Trump said he wants to make more U.S. government investments in healthy American companies even as critics warn that such a role for the government could limit corporate strategy and market agility and questions are raised about the impact on consumers.
The Trump administration last week announced a near-10% stake in chipmaker Intel (INTC.O), opens new tab. It previously intervened to complete the purchase of U.S. Steel by Japan’s Nippon Steel in June, taking what Trump called a “golden share” that gives Washington say over its operations.
It also took a stake in rare earths company MP Materials (MP.N), opens new tab, and brokered a deal with chipmakers Nvidia (NVDA.O), opens new tab and AMD to take 15% of revenue from sales to China of chips that had previously been prohibited.