Trump Emulates China's Planned Economy? Consecutive Market Interventions

Trump's Relentless Interventionism Continues
U.S. Government May Intervene in Korean Companies Operating in America

Yonhap News Agency

Is the United States becoming more like China in its efforts to keep China in check? The free market economy that fueled America's growth has been wavering since the launch of the Trump administration. The Financial Times (FT) even referred to President Trump, who has been intervening in the market, as the "Dirigiste-in-chief." The concern is that this approach by President Trump could extend to foreign companies investing in the United States.

Trump's Interventionist Stance Continues Unabated

The strengthening of President Trump's interventionist policies can be seen in various areas. Just 15 days after President Trump demanded the resignation of Intel's CEO, the U.S. government agreed to convert $8.9 billion (approximately 12.4 trillion won) in subsidies promised to Intel into a 9.9% equity stake. As a result, the U.S. government will surpass private institutional investors such as BlackRock and Vanguard to become Intel's largest shareholder. Of particular note in the market is that on the day the deal was announced, August 22 (local time), the equity stake was acquired at a 17.46% discount compared to Intel's closing price of $24.80. Kevin Hassett, Chair of the White House National Economic Council (NEC), stated that following Intel, the U.S. government may acquire equity stakes in other semiconductor or industrial companies as well.

President Trump, who has continuously called for interest rate cuts by the Federal Reserve, went so far as to notify Federal Reserve Board member Lisa Cook of her dismissal on August 25 (local time). This is the first such case in the 111-year history of the Federal Reserve. President Trump nominated Steve Miran, known as the architect of the administration's tariff policy, as a new Federal Reserve Board member. Lisa Cook immediately announced plans for legal action. If her dismissal is finalized, there are growing concerns that the independence of the Federal Reserve could be seriously compromised.

Potential for Intervention in Korean Companies Operating in the U.S.

The U.S. government's intervention in the market is not unprecedented. In 1985, through the Plaza Accord, the U.S. forced the appreciation of the Japanese yen and German mark (depreciating the dollar) to protect domestic manufacturing. During the 2008 subprime mortgage crisis, the government intervened in the domestic financial market with astronomical bailout funds. However, it is rare for the U.S. government to so openly and directly interfere in domestic monetary policy and corporate management as it does now.

The driving force behind the Trump administration's increasingly proactive interventionism is the desire to contain China. China's state capitalism has enabled it to dominate global manufacturing supply chains, posing a threat to U.S. hegemony. Ultimately, Trump aims to achieve "MAGA" (Make America Great Again) through market intervention policies similar to those of China. The intention is to maintain the U.S. lead in AI-a field critical to national competitiveness-through aggressive intervention, and to reduce the massive fiscal risks that have long been a weakness for the United States.

The issue is that this approach by the Trump administration could have a significant impact on companies investing in the U.S., including those from Korea. Park Sanghyun, an analyst at iM Securities, commented, "The Trump administration may move to acquire equity stakes in other important or key companies. There is a growing likelihood that the U.S. government will demand equity stakes not only from Korean semiconductor firms receiving subsidies, but also from major foreign investors who have made investment commitments as part of future tariff negotiation agreements."

This content was produced with the assistance of AI translation services.