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Trump Expands Economic Intervention Targeting Defense Sector: Government Evaluates Direct Participation in Giants Like Lockheed Martin, Boeing and Palantir
The initiative of the Donald Trump government to intervene directly in the economy gained a new chapter this Tuesday (26). The Republican is exploring ways to make the United States owners of part of the military-industrial complex, a sector that moves trillions of dollars and exerts strong political influence in the country.
Lockheed Martin at the Center of the Debate
“They [government and Pentagon] are thinking about it. There is a huge discussion about defense. Lockheed Martin derives 97% of its revenue from the U.S. government. They are basically an arm of the U.S. government,” said Commerce Secretary Howard Lutnick in an interview with CNBC.
The words had an immediate impact. Lockheed’s shares rose nearly 2% after the statement. The company, the world’s leader in military sales and manufacturer of a wide range of armaments, issued a statement saying that “it continues to maintain its strong working relationship with President Trump and his administration.”
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Expansion of Interventionism
This is not an isolated case. Trump had already secured a “golden share” in Japan Steel after the purchase of U.S. Steel.
He also announced the acquisition of nearly 10% of chipmaker Intel, which is facing financial difficulties.
In addition, he acquired shares in a rare earth company and secured agreements to take part of the profits from previously prohibited chip exports to China.
The move suggests a broad strategy. By also mentioning Boeing and Palantir, Lutnick emphasized that the government may extend its presence to other giants in the sector. Shares of both companies also saw an increase.
Historical Comparisons
The most important thing is that the approach towards defense companies is not common outside of wartime scenarios. The last significant movement occurred during World War II, in the 1940s.
Analysts point out that the degree of interventionism can only be compared to the New Deal, launched in the 1930s to recover the economy after the Great Depression.
The U.S. is not entirely opposed to this type of measure. In the 2008 crisis, the government bought 60% of General Motors to prevent the automaker from going bankrupt. However, that action was emergency-based, and by 2013 the company had already returned to private ownership.
Defense and Geopolitics
Trump has been advocating “deals every day.” The focus on the defense sector stands out because it accounts for US$ 1.1 trillion annually.
According to the International Institute for Strategic Studies, revenue alone is around US$ 300 billion. This is equivalent to half of Brazil’s GDP.
In the context of the American economy, which is nearly US$ 30 trillion, it may seem small, but it carries enormous geopolitical weight.
The U.S. has participated in about 400 foreign military interventions, half of them after 1950. From Ukraine to Gaza, passing through the coast of Venezuela, the country maintains an active and constant presence.
Current military spending is at a historic record: about US$ 1 trillion per year, representing 39.4% of the global total.
Military-Industrial Complex
The term “military-industrial complex” was popularized in 1961 by President Dwight Eisenhower, who warned of the risk of excessive influence of the sector on foreign policy decisions.
Since then, the relationship has remained close, marked by large contracts and the so-called revolving door, with executives transitioning between positions in the private sector and the Department of Defense.
Trump, who has already stated he wants to rename the department as the Department of War, now seems willing to advance beyond this dynamic.
International Models
This type of interaction is not exclusive to the U.S. Brazil, for example, developed the KC-390 aircraft by Embraer based on an order from the Air Force, which altered the entire initial design of the project.
France, Germany, the United Kingdom, and Italy also have their own industries but usually work on joint projects.
The war in Ukraine and the increase in military spending in Europe have boosted the stocks of companies in the sector on the continent, partly due to the perception that Trump is not a reliable ally.
In Russia and China, state control is even stronger. Moscow has reinforced its dominance over the sector amid the war, while Beijing appears well-positioned in the global ranking, driven by exports.
Government and Military Industry: The Next Step
Trump’s interventionism opens a new chapter in the relationship between government and the military industry. The Republican, who already uses tariff measures and incentive policies to shape strategic sectors, now indicates a desire to transform private companies into direct partners of the State.
For the financial market, the signs have already produced immediate effects. For global politics, the impact is still being constructed but promises to be significant.
With information from Folha de São Paulo.
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