policy

Industrial Policy or Cronyism? Inside Washington’s Equity Stakes

The White House’s acquisition of equity in U.S. companies raises questions about conflicts of interest.

This article appears in the November issue of Global Finance Magazine.

The Trump administration has joined a growing number of governments that have embraced industrial policy, often at the expense of strict free-market doctrine. 

In an abrupt break from past practice, the federal government under President Donald Trump has taken equity or equity-like stakes in 34 private-sector companies in the U.S., as of Oct. 1, spanning industries from critical minerals and semiconductors to quantum computing. Its August 2025 announcement that it would take a 10% stake in Intel Corp. marks its biggest such step and makes the U.S. government the chipmaker’s largest shareholder. 

The goal of industrial policy is to put a nation’s economy on a more globally competitive footing by providing government support, increasingly in the form of equity as well as loans and tax credits, to companies deemed strategically important for the economy or for national security. Details vary widely from government to government, but while others have taken equity stakes in private-sector companies, the U.S. approach raises serious concerns.

Critics warn that industrial policy can lead to rent-seeking by governments and corruption at the level of individual government officials. The Trump administration’s practices raise just this issue, according to critics on both the left and right. 

In a recent blog post, Cullen Hendrix, a senior fellow at the Peterson Institute for International Economics, a Washington, D.C.-based center-right think tank, wrote that when state control is exercised in an ad hoc fashion through privately negotiated channels and without any pretense of independent oversight, as the Trump administration has done, “state ownership and control typically redistribute benefits to politically connected clients and away from the public. This potentially corrupting phenomenon is the prevailing concern with the Trump administration’s approach.”


“This is not what anyone could reasonably want from industrial policy.”

Dean Baker, Center for Economic Policy and Research


Dean Baker, co-founder of the Washington, D.C.-based progressive think tank, the Center for Economic Policy and Research, went further in an interview with Global Finance: “It would be overly generous to call this industrial policy. It is simply Trump arbitrarily exercising power. We don’t know whether he or his family have gotten kickbacks from the companies. This is not what anyone could reasonably want from industrial policy.”

The White House offered this statement in response: 

“The only special interest guiding the Trump administration’s decision-making is the best interest of the American people. Securing and reshoring America’s critical supply chains has been a top priority for President Trump, and the Trump administration continues to take historic action to safeguard America’s national and economic security.”  

Several members of Congress contacted for this story did not immediately respond to requests for comment.

Maximizing Discretion

Industrial policy is by no means synonymous with corruption and self-dealing. “There are many examples out there in the world of having more socialist orientation in the economy while still staying loyal and faithful most of the time to price signals and supply and demand,” Hendrix said, noting that many countries take a technocratic approach to managing their holdings. But the Trump administration is following a very different path, “maximizing the independent discretion of the executive.”

The U.S. Commerce Department claims that the government’s stakes in private-sector businesses enhance the return on investment for taxpayers. But “even a profitable portfolio would not resolve the underlying institutional problem,” Tad DeHaven, a policy analyst at the Cato Institute, a Washington, D.C.-based libertarian think tank, said in a recent article on its website. “Even a profitable portfolio would not resolve the underlying institutional problem,” which consists of manifold conflicts of interest. 

“The federal government is now acting as regulator, customer, financier, and shareholder,” he wrote. “Decisions involving contracts, trade restrictions, permits, and subsidies can affect the value of its holdings. Competitors have reason to question whether the playing field is level. And if a portfolio company falters, Washington will have an added incentive to protect its investment with more taxpayer support.”

(Chart below: Five of the Trump administration’s most recent equity stakes in U.S. companies as of Oct. 1,
bringing the total to 34 .)

(Source: Cato Institute)

Might it mitigate these risks to lodge these holdings in a sovereign wealth fund? Wealth funds are common around the world and in the cases of Norway and Saudi Arabia, help to diversify their economies away from dependence on oil revenue. The White House last year announced that it would create such a fund, though none has materialized to date. 

Wealth funds aren’t really designed for industrial policy, Hendrix said, but to maximize returns on surplus revenues in anticipation of a rainy day. Adnan Mazarei, a nonresident senior fellow at the Petersen Institute, added that the standards for governance of wealth funds themselves need improvement, as the so-called Santiago Principles that apply to them and were finalized in 2008 are woefully out of date. 

Even the most stringently negotiated and overseen government investments can still be subject to political influence, even when they are passively managed. But, as Hendrix and other observers noted, there are guardrails that can and should be imposed to limit it. If the state is going to start acquiring assets, Hendrix said, “then you build a bureaucracy within the state to manage those assets.”

So far as the Trump administration’s equity interests are concerned, he noted in his blog post, “the terms under which these stakes have been acquired and managed by the administration—ad hoc, privately negotiated, and with significant executive discretion—are more troubling than the equity stakes themselves.”

Government-held stakes in private-sector companies are unnecessary for effective industrial policy in the first place, Baker said, noting that subsidies such as research grants, tax credits, and patent and copyright protection are more than sufficient. These have helped produce, at least until recently, the world’s leading pharmaceutical industry and highly competitive computer and software companies, he added.

“The best way is to have laws that make industrial policy formulaic, so that it does not depend on executive decisions,” Baker said. “Our patent and copyright monopolies are probably the best examples of this sort of policy.” 

Oversight, Japanese Style

Japan offers a contrasting approach. Its industrial policy was initially administered by the Ministry of International Trade and Industry, which was reorganized in 2001 as the Ministry of Economy, Trade and Industry. Both operated under strict conflict-of-interest oversight.

According to the Organization for Economic Cooperation and Development, responsibility in Japan for addressing anti-corruption that might arise from industrial policy is shared among the Ministry of Justice, the Ministry of Foreign Affairs, and the National Police Agency, while the National Public Service Ethics Board monitors potential conflict-of-interest situations for civil servants and the Ministry of Internal Affairs supervises political finance.

“The central government has adopted strategic objectives for mitigating public integrity risks in public procurement,” the OECD noted in a 2024 analysis comparing Japan’s industrial policy with other governments. 

According to an index of government control of private industry maintained by the Varieties of Democracy Institute at the University of Gothenburg in Stockholm, the U.S. dropped from second place in the world for freedom from such control, a position it had held since 2007, to 16th this year, while Japan has maintained its long-standing position in first place, notwithstanding its commitment to industrial policy.

The CHIPS and Inflation Reduction Acts passed by Congress under the Biden administration represent a form of industrial policy, but, Hendrix observed, the support they provided for the semiconductor and green energy industries came primarily in the form of tax credits and other subsidies. Equity stakes were not taken under CHIPS, although the Trump administration used money appropriated by CHIPS for the Intel acquisition.

Weaponizing Uncertainty

There’s some question whether Washington even has the authority to purchase equity in private-sector companies, as Peter Harrell, an attorney specializing in international economic law and a member of the Council on Foreign Relations, wrote in a recent article at Lawfare. Congress may have to step in to make sure that the “profound policy questions” raised by such stakes are addressed, he added. 

“If Congress wants the government to expand its role in the private sector,” Harrell wrote, “it could also adopt more general legislation — a modern-day Government Corporation Control Act — stipulating how and under what circumstances the government could take equity and setting out how such equity should be governed.”

In Hendrix’s view, however, the White House is likely to oppose such legislation: “The Trump administration does not like an institutional approach. It values having strategic autonomy and being able to weaponize uncertainty.” 

Baker said, by contrast, that a new bureaucracy is unnecessary. “Congress and the courts have all the tools needed to rein in the Trumpian abuses,” he said. “A stake in specific companies will provide an incentive to throw good money after bad. We should use regulatory policy to promote desirable investment and discourage harmful practices. An ownership stake is not needed for these goals.” 

The weaponization of uncertainty was evident in the case of Intel, where the administration pushed for the removal of CEO Lip-Bu Tan because of his ties to China before relenting in exchange for its equity stake. Unless the White House drops this approach, the criticisms of conflict of interest in U.S. industrial policy will continue to mount. 

Ronald Fink is a contributing writer based in the U.S.

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Brazil’s Lula and Bolsonaro debate policy proposals before run-off | Elections News

Polls indicate Brazil’s presidential candidates are neck and neck before Sunday’s voting.

Brazilian President Luiz Inacio Lula da Silva and his right-wing rival Flavio Bolsonaro have focused on policy proposals in the final debate before their presidential run-off.

The candidates questioned each other on Friday, two days before the election, about Brazil’s economy, infrastructure and regional development.

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Lula challenged his rival’s plan to take a “chainsaw” to public spending in a manner similar to that of Argentina’s libertarian president, Javier Milei.

“I’ll have the same job here [as Milei in Argentina] because you’re leaving the country bankrupt,” Bolsonaro responded.

Bolsonaro, son of former right-wing President Jair Bolsonaro, accused the incumbent of allowing organised crime to expand, driving families into debt and not addressing the higher cost of living.

“He doesn’t know what hunger is,” Brazil’s first working-class president said of Bolsonaro, who responded, “Why are things so expensive?”

Lula questioned the senator’s experience, saying, “He doesn’t know Brazil.”

His challenger doubled down on presenting himself as a capable candidate who represented change for the country.

Supporters of President and presidential candidate Luiz Inacio Lula da Silva follow a televised debate between him and Brazil's right-wing presidential candidate Flavio Bolsonaro ahead of the election runoff in Sao Paulo, Brazil on October 23, 2026. (Photo by Juan BARRETO / AFP)
Supporters of President Luiz Inacio Lula da Silva follow the televised debate between him and Flavio Bolsonaro before the run-off [Juan Barreto/AFP]

Tense moments

Friday’s debate in Rio de Janeiro, which was broadcast on TV Globo, was notably more diplomatic than their initial face-off on Sunday but also saw its share of personal attacks and tense moments.

Bolsonaro called Lula “Nine Fingers”, a pejorative nickname used by many of his supporters that references an accident the Brazilian president suffered during his time as a metalworker. The 80-year-old leader demanded an apology, which Bolsonaro gave him.

Lula in response called Bolsonaro a vigilante, referring to allegations that his rival has ties to paramilitary groups in Rio de Janeiro. Bolsonaro said he would classify those groups as “narcoterrorists”.

The third tense exchange was between Bolsonaro and the mother of a five-year-old who was killed in a shootout that involved a policeman who had the presidential candidate as his lawyer. Bolsonaro said he doesn’t believe his client was guilty.

Bolsonaro finished first in the initial round of voting on October 4 with 47 percent of the vote to Lula’s 45 percent.

A Datafolha institute survey published on Thursday suggested the pair are now tied with 50 percent support each, compared with Bolsonaro’s four-point lead in polls published two weeks ago.

Both candidates are expected to join supporters in the streets of Rio de Janeiro and Sao Paulo in their last campaign effort before Sunday’s run-off.

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UK threatens visa bans for Eritrea over migrant return policy

Home Secretary Shabana Mahmood has threatened to ban all Eritreans from entering the UK if the east African country’s government does not accept more returns of small boat migrants and foreign national offenders.

From Thursday, Eritrean diplomats will face restrictions on their movement outside London. Fast-track visas will also be stopped for VIPs.

Ministers have previously pressured other countries into accepting returns by threatening visa bans.

Eritreans were the most common nationality among small boats migrants in the 12 months to June – accounting for 18% of arrivals, external, according to figures from the House of Commons Library.

The Eritrean embassy in London has been contacted for comment.

“Eritrea has had every chance to accept the return of criminals and those with no right to be in the UK. Unlike other countries, it has refused,” said Mahmood.

She said she would not hesitate “to impose further measures on other countries refusing to co-operate”.

The UK government accused the Eritrean authorities of “abruptly” withdrawing co-operation earlier this year.

The restrictions mean diplomats are banned from travelling 60km outside London without permission.

The Home Office said this mirrored restrictions on British officials in Eritrea’s capital Asmara.

Earlier this year, the UK threatened bans against Angola, Namibia and the Democratic Republic of Congo (DRC).

Restrictions were announced against the DRC last year, but the Home Office said these have been lifted after co-operation on returns improved.

Angola and Namibia both agreed changes before restrictions were introduced.

When announcing changes to the UK’s asylum system in November, Mahmood said visa penalties would be applied to countries that failed to co-operate with returns policies.

Penalties included an “emergency brake” on visas for countries with high asylum claims until they take back citizens in the UK illegally.

According to Home Office data, more than 20,400 people have arrived in the UK by small boats so far since the beginning of this year, down 40% from the same period last year.

There were more than 40,600 returns and deportations from the UK from July 2025 to June this year – an 8% increase on the same period last year.

Of those who had been returned, less than 6,000 has been convicted of a criminal offence.

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Deported to Central African Republic, a transgender woman who lived openly in Miami is hiding again

In Miami, Daniela Fuentes styled hair for clients and performed in drag at a nightclub called Azúcar. She wore her blond wig in public and dressed as the woman she had known herself to be since adolescence in Cuba.

Now, more than 6,000 miles away in the Central African Republic, she wears men’s clothes, lowers her voice and tries not to draw attention to the breasts she developed after beginning hormone treatment as a teenager. As part of U.S. efforts to deport people to countries other than their own, authorities sent her Aug. 29 to a place where she has no ties and where advocacy groups have reported arbitrary detention, torture, and other rights violations of sexual and gender minorities.

“Everything is difficult here because I have to hide who I am,” said Fuentes, a 32-year-old transgender woman living on a compound she rarely leaves, sharing a room with four Cuban men also deported from the U.S. “I don’t know this place, the people or the language, and I have no idea what will happen to me.”

The Central African Republic — one of the world’s poorest countries, a place with a history of conflict that the U.S. State Department advises American travelers to avoid — is one of at least 12 African nations that signed agreements to accept “third-country” deportations, a policy the U.S. Supreme Court last month allowed to continue, at least temporarily.

In the Central African Republic — where transgender people have little to no legal protections and are marginalized in much of society — Fuentes dons her wig only in the privacy of her bathroom. She described disguising herself as protection, first in U.S. detention and now in a country she first heard of when she was already headed there on a deportation flight.

“My whole life, my whole identity, was taken away from me,” Fuentes said.

Public records say a judge ordered Fuentes to leave the U.S. but offer no other information. Immigration and Customs Enforcement officials did not reply to emailed questions.

Tens of thousands of people have been deported to “third countries”

Fuentes’ compound in the capital, Bangui, is an apartment complex where the government houses male deportees.

Fuentes said she can leave but that officials have advised her and others to avoid it — they have no identification, which could lead to issues with the police. It also means they can’t work, she said, and she’s waiting on travel documents that would allow her to leave the country. The International Organization for Migration, an agency associated with the United Nations, has provided food, and the migrants say they’ve crowdsourced for donations to buy groceries.

The U.S. — via agreements often not made public — has deported about 25,000 people to more than two dozen countries that aren’t their own, the vast majority to Mexico, according to a tally by Third Country Deportation Watch, a partnership of Refugees International and Human Rights First. The U.S. has not released numbers or details.

From January 2025 to August 2026, more than 500 were sent to countries in Africa, according to a Human Rights Watch report published Thursday — including at least 12 people who identify as lesbian, gay, bisexual or transgender and were deported to places that criminalize same-sex relations or public same-sex romantic conduct. Some advocates say the number is likely higher.

“These are not bureaucratic errors or isolated incidents,” said Bridget Crawford, of the group Immigration Equality. “They are the predictable result of policies that purposefully abandon our legal and moral obligation to protect LGBTQ+ immigrants fleeing persecution.”

The U.S. government says the policy is lawful and that receiving governments provide assurances deportees won’t be persecuted or tortured.

Daniela Fuentes says ICE detained her with men before deportation

Fuentes grew up in La Lisa, on Havana’s outskirts, and said she understood from childhood that she was different. She began living as a woman in adolescence and started taking hormones at 18.

She ran a salon from her home, coloring and cutting hair. She said she was harassed because of her gender identity and attacked at least twice, leaving scars on her arm and head. Police also questioned her about operating a private business, she said — though housefront businesses are common in the area.

In 2023, Fuentes sold her home and left amid a deepening economic crisis and a crackdown on dissent — even as Cuba, one of Latin America’s most progressive countries for LGBTQ+ rights, adopted new inclusion laws. Making her way to the U.S., she said, she presented as a man traveling through Central America; she believed it was safer.

After seven months in Mexico, she said, she entered the U.S. through Texas via CBP One, a President Joe Biden-era online appointment system that allowed migrants to live in the country for two years on humanitarian grounds. Then she went to Miami.

There, she began living openly as a woman again. She found work styling hair and performed at Azúcar. Though she lacked permanent legal status, Fuentes said Miami offered something she’d rarely experienced: the freedom to move through daily life as herself.

That ended when officers encountered her outside a motel. Fuentes said they learned she had missed an immigration court hearing in Texas. She said she asked that the case be moved to Florida but received no response.

Fuentes said she was taken into custody and later placed in immigration detention with men. Officials confiscated her wig and gave her a male detainee’s uniform, she said.

Such treatment is in line with a January 2025 executive order directing officials to exclude transgender women from women’s prisons and detention centers.

“When I learned that they were going to put me with men, I almost fainted,” Fuentes said.

Deportees said they boarded a flight without knowing the destination

Fuentes was held at two detention facilities in Florida, then transferred to Texas. When armed officers arrived there, she said, she suspected she was facing deportation, but they didn’t reveal she was being sent to Africa until about five hours into the flight.

Other deportees on the flight told AP they also weren’t told the destination until they were on the plane. Dozens have been sent to the Central African Republic, including an Iranian woman facing persecution in her home country and an Afghan whose brothers worked with the U.S. military.

Fuentes said she does not understand why she was sent to Africa rather than Cuba. She told AP she has no lawyer.

The U.S. does repatriate Cuban citizens, as part of agreements to resume deportation flights in 2023, despite tensions in relations between the countries. Charter flights have arrived in Havana regularly.

Yasmany Moreno, another Cuban deportee in Bangui, said that upon arriving, the group had no visas or documents establishing their legal status in the country. Officials spoke of providing assistance for 90 days, he said, but the deportees didn’t know what would happen afterward or where they would live.

Several told AP their longer-term status remained unclear and that U.S. authorities had taken their identity documents.

A policy officer at the Central African Republic’s Foreign Ministry said the deportees are in “good hands” and are being monitored by the International Organization for Migration. He spoke on condition of anonymity because he was not authorized to discuss the matter publicly.

The U.S. this year committed to $85 million in funding to IOM for Central African Republic operations including “assistance to migrants” and “community stabilization.”

IOM says migrants can seek asylum in the country, request assistance to return home or get help traveling to another place they’re authorized to enter. It referred questions about the deportees’ status and individual cases such as Fuentes’ to Central African Republic officials. A government spokesperson didn’t reply to phone calls and text messages seeking comment.

Human Rights Watch’s report says some people deported to third countries face detention, abuse and the prospect of persecution. Eswatini has held deportees in a maximum-security prison without charges. Equatorial Guinea has held them against their will at a hotel owned by the president’s family.

“Several of these African governments are not only complicit in U.S. abuses but have violated the human rights of these deported people themselves,” Michael Garcia Bochenek, of Human Rights Watch, said in a statement.

Fuentes and other deportees say they can’t work, with most days spent at the compound

Fuentes said the Cuban men in her room know she is a woman and look out for her. She rarely feels safe enough to leave. Once, at a supermarket, workers pointed at her breasts and initially refused to sell her fruit, she said. Other people in Bangui have mocked her and pointed at her.

“My personal appearance is awful,” she said. “I look like a different human being.”

Moreno described restrictions on the group’s movements, saying officers accompanied them to the market and on occasional outings but restricted them from going out at night.

Fuentes and Moreno said they have no passports or other identification and cannot work. Most days, Fuentes remains at the compound, looking at her phone and waiting for travel documents.

She said Cuba has agreed to accept her return — a Cuban embassy document shows she is authorized.

But Fuentes said she hopes to seek asylum elsewhere, possibly Canada.

“The harassment and economic hardship that caused me to flee still remain,” she said.

Banchereau writes for the Associated Press. Jean Fernand Koena in Bangui, Central African Republic; Tim Sullivan in Minneapolis; and Cristiana Mesquita in Havana contributed to this report.

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