To the Journal editor:

Once again President Trump forced a business to give a share of it’s ownership to the United States government. On Oct. 6, Bloomberg News reported that the government will take a 10 percent share of Trilogy Metals, Inc., as part of a $35.6 million investment in Alaska mining projects. Previously, President Trump “negotiated” deals that include partial U.S. ownership of Intel and U.S. Steel. In addition, the U.S. acquired shares of Lithium Americas Corp. to develop a mine in Nevada, as well as equity in MP Materials Corp.

Americans should be concerned about this emerging trend for several reasons. First is the potential for government corruption. It appears that Intel was pressured to give up a portion of their ownership in exchange for government grants that were made available by Congress without a requirement that recipients relinquish ownership. In the case of U.S. Steel, the government’s “golden share” was a condition of allowing the business to be acquired by Nippon Steel. With Trilogy Metals, it looks like conceding partial ownership to the U.S. government was in exchange for waiving environmental regulations for a road to the mine in a remote area in Alaska. While the President portrays these as voluntary agreements, each of these cases looks like extortion.

A second concern is that not all businesses are being treated in the same way. For example, five major companies received more than a billion dollars each under the CHIPS and Science Act passed by Congress in 2022 to provide grants to companies to build semiconductors in the U.S. To date, only Intel has been made to convert its grants into equity shares for the federal government.

Third, it appears that some businesses are receiving funding without a bidding process. For example, MP Materials Corp received a $400 million equity investment from what was then the Department of Defense to build a plant for rare-earth magnets (Bloomberg News, Oct. 6). This form of acquisition seems highly unconventional for the federal government, and potentially unfair to other businesses that may have wanted to compete for the same deal.

Fourth, it is not clear that Congress has passed laws to allow this type of government ownership of businesses. By contrast, the rescue of Michigan automakers during the Obama administration was carried out by Troubled Asset Relief Program created by Congress in 2008 (PL 110-343). It does not appear that Congress has had any debate about the merits of the current acquisitions of shares of companies, any review of the agreements, or any say in who will represent the government’s interests in relationships with these companies.

A fifth reason that Americans should be concerned is that the federal government has a conflict of interest when it is both an owner and a regulator of businesses. Americans should expect the federal government to represent the best interests of our citizens when it comes to issues like safety and environmental regulation and not be motivated by making a profit for a business the government owns.

Ironically, one the President’s favorite epithets for Democrats is calling them Marxists, socialists and communists. Communism and Marxism are generally defined as state ownership of businesses, which is what President Trump is doing when he forces companies to give partial ownership to the federal government. Until now, both Republicans and Democrats have supported our economic system of capitalism, meaning private ownership of production in a competitive market. President Trump’s departure from capitalism is worthy of discussion and debate, including Congressional oversight.