Trump’s Intel deal gambles with the perils of picking national champions

s·CEO DailyTrump’s Intel deal gambles with the perils of picking national championsBy Geoff ColvinBy Geoff ColvinSenior Editor-at-LargeGeoff ColvinSenior Editor-at-LargeGeoff Colvin is a senior editor-at-large at Fortune, covering leadership, globalization, wealth creation, the info revolution, and related issues.SEE FULL BIO Intel CEO Lip-Bu Tan.Courtesy of IntelIn today’s CEO Daily: Geoff Colvin on the Trump administration’s deal with Intel

The big story: Trump tries to fire a Fed governor

The : Global selloff underway

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Then, yesterday, National Economic Council Director Kevin Hassett told CNBC, “I’m sure that at some point there’ll be more transactions, if not in this industry, in other industries.” He ned the deal to a “down payment on a sovereign wealth fund.” But why? Why now? What’s next? For answers, I spoke with three experts on government investments in companies

Three themes came through—though answers were harder to find

This deal is none other. “It is entirely unusual, if not unprecedented, for the United States government to take a significant ownership stake in a major company in the United States, particularly one in a strategic industry,” says Douglas Rediker, a lawyer and economist with long experience in global finance, sovereign wealth funds, global capital flows, and their impact on foreign policy

Luigi Zingales, a fessor at the University of Chicago school, says, “The thing that, to me, is shocking and unbelievable is that it starts as an attack to the CEO based completely on his potential self-dealing—which might be true, might not be true—but if that’s the blem, it cannot be solved by giving some stock to the U.S. government.” The deal’s objective is far from

William Megginson, a fessor at the University of Oklahoma school, has reed the privatization of state-owned enterprises and sovereign wealth funds

If you have an objective, you can say it is right or wrong, feasible or not feasible

But without a objective, it’s kind of a mess.” Intel’s competitors won’t this deal, and they can’t know what to expect. “Are we now in an era in which the U.S. government is literally picking national champions, and if so, what does that say to other companies?” Rediker asks. “Does that mean Intel will now be given preferential treatment in, for example, government contracts? If you’re Intel’s competitors, you might be scratching your head and saying, Maybe we want to go in a different direction if we’re going to be commised or disadvantaged because Intel is now the favorite son of the industry.” If you’re a CEO, have worked for Intel in the past (or compete with them), I’d be particularly curious to hear your thoughts on the state of affairs

You can me directly at Geoff.Colvin@fortune.com

Top newsPresident Trump fires Fed GovernorPresident Donald Trump announced via Truth Social Monday night that he is firing Fed Governor Lisa Cook after she was accused of taking out two loans in which she attested that both were her primary residence

Cook has not been accused of wrongdoing in any formal legal cess

The move casts doubt over the Fed’s independence as Trump-appointed Fed governors would represent a majority on the Fed board if Trump appoints a replacement

Cook says she will not leave her post, setting up a legal conflict over whether the president has a right to remove a governor “for cause.” The NYT has a useful bio describing Cook’s career as an economist.Wall Street is aghastWhat they’re saying today: “This is an extraordinary act of aggression that violates the Fed’s independence,” Eswar Prasad, a fessor at Cornell University, told the FT. “Trump has now declared open war on the US institutional framework, which underpins the dollar’s dominance in global finance.” … “This is unprecedented,” Lev Menand, a Columbia Law School fessor said. “If this removal sticks ... it spells something close to the end of central bank independence in the U.S.” … “It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court,” said Sen

Elizabeth Warren (D-Mass.).“They have to give us magnets”President Trump has hit a wrinkle in his trade negotiations with China: China controls 90% of the supply of rare earth minerals that are crucial for electronics and military equipment that depend on high-powered magnets. “They have to give us magnets, if they don’t give us magnets, then we have to charge them 200% tariffs or something,” Trump said yesterday

The Economist has a good article China’s export strategy here

The bottom line: China has what the U.S. needs and thus holds a strong hand in the tariff talks.Canada and Germany pledge cooperation on mineral supplyUnsurprisingly, the EU and Canada are maneuvering to develop trade ties that increase the supply of minerals without involving the U.S. “For too long, Canada’s vast reserves of nickel, cobalt, and other critical minerals have been underdeveloped, allowing Russia and China to dominate the global market,” Canadian Prime Minister Mark Carney said yesterday. “Canada is ready to be a reliable supplier for our allies — particularly Germany, as Europe’s largest economy and Canada’s largest trading partner in the European Union.”Postal services, parcel shippers drop deries to the U.S.The “de minimis” exemption to Trump’s tariffs (which allows small es and individuals to send parcels to the U.S. worth less than $800 tariff-free) comes to an end this week, and at least 19 countries in Europe are pausing or dropping service to the U.S. as a result

The verdict, if upheld on appeal, threatens to impose massive, long-term liabilities on Tesla in car crashes involving the company’s driver assistance software

Tesla said it would appeal.CBO: Tariffs will cut $4 trillion from federal deficitThe Congressional Budget Office believes that the Trump Administration’s tariffs will cut federal deficits by $4 trillion over the next decade

Coinbase CEO’s AI mandateIn a recent appearance on the Cheeky Pint podcast with Stripe cofounder and president John Collison, Coinbase CEO Brian Armstrong noted that he mandated every engineer at the company to use AI coding assistants within a week's time and fired those without a good reason for ignoring the mandate. “Even as CEO, by the way, I use it a lot,” Armstrong also said.More Epstein documents subpoenaedThe House Oversight Committee has demanded documents from Jeffrey Epstein’s estate in hopes of discovering more the “birthday book” given to Epstein that reportedly contained a warm message from Trump to his former friend. (Trump denies he wrote it.) The DOJ has already dered thousands of pages that it held on Epstein

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