cawacko
Well-known member
This is industrial policy. Biden tried it with CHIPS and IRA and we saw how 'well' that worked. Now Trump is taking the same playbook, only packaged differently. It reminds me of how people would argue socialism could work, if only done the right way.
We're looking more like China's state run capitalism.
President Trump’s team is weighing a plan to spur the construction of factories and other infrastructure in a bid to jump-start the American manufacturing sector, according to documents and people familiar with the discussions.
Under the plan, the administration would use money from a $550 billion investment fund established as part of trade negotiations with Japan to invest in the development of semiconductors, pharmaceuticals, critical minerals, energy, ships and quantum computing.
Some of the projects would be granted preferential treatment from the government, including expedited regulatory review. The administration is considering granting leases to companies that would give them access to federal land and water, according to the people and documents reviewed by The Wall Street Journal.
The plan would mark a new frontier in Trump’s efforts to exert influence over the private sector, giving the government a central role in the reshaping of U.S. manufacturing. It comes as the president has secured a government stake in Intel, negotiated a “golden share” in U.S. Steel and persuaded chip companies to give the U.S. a cut of certain sales to China.
The details of how such a far-reaching program would be implemented are still being ironed out, and those with direct knowledge of the negotiations cautioned that the plans could change. In a statement, White House spokesman Kush Desai said Japan’s $550 billion investment fund “will be key to fueling America’s next Golden Age.”
Trump, a former real-estate developer, has made reviving U.S. manufacturing a centerpiece of his second-term agenda, arguing that his trade policy will reshore supply chains and lead to an explosion of new jobs. Manufacturing employment has faltered this year, with the sector shedding 38,000 jobs over the eight months through August, even as the overall economy has continued to add jobs.
If successful, the proposed plan could help the president deliver on his campaign promises. It would also give Trump control over which industries get the benefit of government assistance. Any effort on such a large scale would likely take years—or even decades—to complete. Trump’s successor in the White House could abandon the project, raising questions about whether companies would have enough long-term certainty to sign on.
Trump and Commerce Secretary Howard Lutnick have privately discussed building facilities that would produce gas turbines and generic pharmaceuticals. They have also discussed investing in new nuclear power plants and pipelines, the people familiar with the matter said. Trump announced a joint venture with Japan to build a liquefied natural gas pipeline in Alaska after the negotiations between the two countries.
Trump and Commerce Secretary Howard Lutnick, right, have discussed building facilities that would produce gas turbines and generic pharmaceuticals. Photo: jonathan ernst/Reuters
A memorandum of understanding signed by the U.S. and Japan earlier this month would grant Trump wide latitude to direct how the $550 billion in investments is spent. The memo sets up a committee, chaired by Lutnick, that recommends projects to the president. After costs of a project are split 50-50 between the U.S. and Japan, the U.S. would take 90% of the profits from the investments.
Trump could increase tariffs if Japan declines to fund a selected project entirely, according to the memo, or force Japan to forfeit some of its returns from a project if it is only partially funded. Japanese vendors will be given priority over other foreign companies in the projects, the memo says, but the ultimate structure of the funding—whether it is through equity, debt or loan guarantees—remains unclear.
Under the proposal being discussed by administration officials, the U.S. would work with companies to construct new U.S. facilities and those buildings could then be leased possibly for decades, some of the people familiar with the matter said.
In a recent interview with CNBC, Lutnick said the trade deals reached by the U.S. with other countries would lead to “factories built in America at a scale that you have never seen before.” A U.S.-based adviser to Japan said Trump administration officials and Japan’s team have discussed using at least some of the $550 billion to help build factories in the U.S. The adviser noted the situation remains fluid and there are more than a dozen other proposals under consideration for how to use the money.
Lutnick has also said that the U.S. government should receive a cut of the profits that stem from patents developed at universities that receive federal funding. “If we fund it and they invent a patent, the United States of America taxpayer should get half the benefit,” he told Axios in a recent interview.
Trump’s allies in Congress have other plans for how Japan’s investments should be used. Senate Republicans plan to propose to Trump the idea of funneling money from Japan’s fund to the Commodity Credit Corporation, a government-owned entity that assists the farming industry, according to a senior lawmaker.
Some Republican lawmakers are skeptical about government intervention in the private sector. Sen. Bill Hagerty (R., Tenn.), who has been consulting with Japanese financial institutions and the Trump administration on how to design the nascent infrastructure fund, said it is understandable that the U.S. wants to take more control to counter strategic vulnerabilities that result from the country’s lack of manufacturing capabilities in certain sectors.
“But broadly speaking I’m not a proponent of the government playing a bigger role” in the manufacturing sector, said Hagerty, who served as Trump’s first-term ambassador to Japan.
Treasury Secretary Scott Bessent with Japanese Economic Revitalization Minister Ryosei Akazawa. Japan agreed to establish a $550 billion investment fund in trade talks. Photo: kim kyung-hoon/Reuters
The decision on how to deploy the money is facing other hurdles.
The exact contours of Japan’s $550 billion investment have been the subject of some dispute. Shortly after Trump announced the deal with Japan, the country’s trade negotiator, Ryosei Akazawa, outlined a view of the $550 billion investment pledge that was slightly different from Trump’s interpretation. Akazawa said Japan would offer a mix of investment, loans and loan guarantees. Japanese officials have said the expectation is for the money to be used to benefit Japan.
At the same time, some companies are hesitant to turn to the Trump administration for financial assistance, concerned about owing money to the government for years to come.
During a recent private meeting with CEOs in the Oval Office, Trump asked how he could be helpful with their companies’ plans to build new facilities in the U.S., according to an attendee. None of the CEOs asked for government money from Trump. Instead, those who spoke up pointed to streamlining regulations as the most important way to encourage business growth, the attendee said.
Lutnick has described Japan’s investment as a capital call, using a common Wall Street term that refers to requesting money from committed investors as projects are identified.
“They are going to give America money when we ask for it to build the projects. How do they plan to fund it? That’s their business,” Lutnick told CNBC in an interview.
We're looking more like China's state run capitalism.
Trump’s Team Explores Government-Backed Manufacturing Boost
Discussions center on how to use money from a $550 billion fund to spur construction of factories and other infrastructure
President Trump’s team is weighing a plan to spur the construction of factories and other infrastructure in a bid to jump-start the American manufacturing sector, according to documents and people familiar with the discussions.
Under the plan, the administration would use money from a $550 billion investment fund established as part of trade negotiations with Japan to invest in the development of semiconductors, pharmaceuticals, critical minerals, energy, ships and quantum computing.
Some of the projects would be granted preferential treatment from the government, including expedited regulatory review. The administration is considering granting leases to companies that would give them access to federal land and water, according to the people and documents reviewed by The Wall Street Journal.
The plan would mark a new frontier in Trump’s efforts to exert influence over the private sector, giving the government a central role in the reshaping of U.S. manufacturing. It comes as the president has secured a government stake in Intel, negotiated a “golden share” in U.S. Steel and persuaded chip companies to give the U.S. a cut of certain sales to China.
The details of how such a far-reaching program would be implemented are still being ironed out, and those with direct knowledge of the negotiations cautioned that the plans could change. In a statement, White House spokesman Kush Desai said Japan’s $550 billion investment fund “will be key to fueling America’s next Golden Age.”
Trump, a former real-estate developer, has made reviving U.S. manufacturing a centerpiece of his second-term agenda, arguing that his trade policy will reshore supply chains and lead to an explosion of new jobs. Manufacturing employment has faltered this year, with the sector shedding 38,000 jobs over the eight months through August, even as the overall economy has continued to add jobs.
If successful, the proposed plan could help the president deliver on his campaign promises. It would also give Trump control over which industries get the benefit of government assistance. Any effort on such a large scale would likely take years—or even decades—to complete. Trump’s successor in the White House could abandon the project, raising questions about whether companies would have enough long-term certainty to sign on.
Trump and Commerce Secretary Howard Lutnick have privately discussed building facilities that would produce gas turbines and generic pharmaceuticals. They have also discussed investing in new nuclear power plants and pipelines, the people familiar with the matter said. Trump announced a joint venture with Japan to build a liquefied natural gas pipeline in Alaska after the negotiations between the two countries.
Trump and Commerce Secretary Howard Lutnick, right, have discussed building facilities that would produce gas turbines and generic pharmaceuticals. Photo: jonathan ernst/Reuters
A memorandum of understanding signed by the U.S. and Japan earlier this month would grant Trump wide latitude to direct how the $550 billion in investments is spent. The memo sets up a committee, chaired by Lutnick, that recommends projects to the president. After costs of a project are split 50-50 between the U.S. and Japan, the U.S. would take 90% of the profits from the investments.
Trump could increase tariffs if Japan declines to fund a selected project entirely, according to the memo, or force Japan to forfeit some of its returns from a project if it is only partially funded. Japanese vendors will be given priority over other foreign companies in the projects, the memo says, but the ultimate structure of the funding—whether it is through equity, debt or loan guarantees—remains unclear.
Under the proposal being discussed by administration officials, the U.S. would work with companies to construct new U.S. facilities and those buildings could then be leased possibly for decades, some of the people familiar with the matter said.
In a recent interview with CNBC, Lutnick said the trade deals reached by the U.S. with other countries would lead to “factories built in America at a scale that you have never seen before.” A U.S.-based adviser to Japan said Trump administration officials and Japan’s team have discussed using at least some of the $550 billion to help build factories in the U.S. The adviser noted the situation remains fluid and there are more than a dozen other proposals under consideration for how to use the money.
Lutnick has also said that the U.S. government should receive a cut of the profits that stem from patents developed at universities that receive federal funding. “If we fund it and they invent a patent, the United States of America taxpayer should get half the benefit,” he told Axios in a recent interview.
Trump’s allies in Congress have other plans for how Japan’s investments should be used. Senate Republicans plan to propose to Trump the idea of funneling money from Japan’s fund to the Commodity Credit Corporation, a government-owned entity that assists the farming industry, according to a senior lawmaker.
Some Republican lawmakers are skeptical about government intervention in the private sector. Sen. Bill Hagerty (R., Tenn.), who has been consulting with Japanese financial institutions and the Trump administration on how to design the nascent infrastructure fund, said it is understandable that the U.S. wants to take more control to counter strategic vulnerabilities that result from the country’s lack of manufacturing capabilities in certain sectors.
“But broadly speaking I’m not a proponent of the government playing a bigger role” in the manufacturing sector, said Hagerty, who served as Trump’s first-term ambassador to Japan.
Treasury Secretary Scott Bessent with Japanese Economic Revitalization Minister Ryosei Akazawa. Japan agreed to establish a $550 billion investment fund in trade talks. Photo: kim kyung-hoon/Reuters
The decision on how to deploy the money is facing other hurdles.
The exact contours of Japan’s $550 billion investment have been the subject of some dispute. Shortly after Trump announced the deal with Japan, the country’s trade negotiator, Ryosei Akazawa, outlined a view of the $550 billion investment pledge that was slightly different from Trump’s interpretation. Akazawa said Japan would offer a mix of investment, loans and loan guarantees. Japanese officials have said the expectation is for the money to be used to benefit Japan.
At the same time, some companies are hesitant to turn to the Trump administration for financial assistance, concerned about owing money to the government for years to come.
During a recent private meeting with CEOs in the Oval Office, Trump asked how he could be helpful with their companies’ plans to build new facilities in the U.S., according to an attendee. None of the CEOs asked for government money from Trump. Instead, those who spoke up pointed to streamlining regulations as the most important way to encourage business growth, the attendee said.
Lutnick has described Japan’s investment as a capital call, using a common Wall Street term that refers to requesting money from committed investors as projects are identified.
“They are going to give America money when we ask for it to build the projects. How do they plan to fund it? That’s their business,” Lutnick told CNBC in an interview.
