In late August, Howard Lutnick, President Trump’s commerce secretary, flashed his trademark grin as he sat alongside Lip-Bu Tan, the chief executive of Intel, in Mr. Lutnick’s office. They were waiting to cross Pennsylvania Avenue to sign an unusual agreement that would extend Mr. Trump’s influence over corporate America in a way not seen in generations.
Over the previous week, Mr. Lutnick had hammered out a deal with Mr. Tan and other Intel executives to make the government the largest shareholder of the U.S. tech giant. The agreement came together after Mr. Trump said Mr. Tan should resign because of his ties to Chinese companies, a comment that sent the company scrambling.
“America should have shares,” Mr. Lutnick told Mr. Tan, according to a video posted on social media. “Because it’s just fair. And we agreed together, and then you went to your board of directors, and they agreed.”
“This is exactly what Donald Trump is all about,” Mr. Lutnick added.
In recent months, Mr. Trump has announced a series of convention-bashing moves that have expanded the economic reach of the government into corporate America, setting companies on edge. In addition to Intel, the administration has moved to take a stake in U.S. Steel and in a rare earths producer, MP Materials. Officials have suggested that the United States could take shares in other industries like defense and shipbuilding.
Mr. Trump has also talked about taking a cut of A.I. chip sales to China, and has used the threat of tariffs to strong-arm Japan and South Korea into agreeing to put hundreds of billions of dollars into a fund that will be controlled by the United States. The agreement allows Mr. Trump to invest the money largely at his discretion during his presidency.
Mr. Lutnick has publicly praised Mr. Trump for these moves, applauding his deal-making and leadership. But Mr. Lutnick — a former Wall Street bond broker who shares Mr. Trump’s desire to run the government as a business and use unconventional pressure tactics — has played an important role in facilitating and, in some instances, thinking up these plans.
As commerce secretary and a top official in charge of Mr. Trump’s trade negotiations, Mr. Lutnick has an array of powerful economic levers to deploy. They include threatening to impose tariffs on goods like cars, chips and steel; halting manufacturing grants; and withholding licenses to export.
He has used those abilities freely and enthusiastically in recent months to try to squeeze more investment and other concessions out of companies and foreign governments, according to interviews with more than a dozen current and former officials and industry executives. Many of them spoke on the condition of anonymity because they either were not authorized to speak publicly or did not want to become targets of the White House.
Mr. Lutnick’s efforts revolve around a newly created initiative inside the Commerce Department called the Investment Accelerator. While little is known about the initiative — including to some in the department — Mr. Lutnick appears to be turning it into a fund that can collect foreign capital and negotiate equity stakes in companies. The investment vehicle can then direct those resources toward accomplishing Mr. Trump’s goals, like building out America’s industrial capacity or potentially generating funding to pay down the national debt.
But Mr. Lutnick’s moves are raising a variety of concerns among companies, government officials and others, including whether the Commerce Department has the authority to invest in private-sector firms and whether this will end up creating economic distortions as the United States picks winners and losers. They have also trampled traditional conservative ideas about keeping the government out of the private market.
While some department employees, including some appointed by Mr. Lutnick, are concerned about the measures, they are afraid to push back for fear of getting fired, current and former officials said.
Some corporate executives are now afraid to lobby the administration directly out of fear they will be pressured for something in return. Some have privately likened the treatment to tactics used by the Mafia. Before inviting Mr. Tan into the Oval Office, Mr. Trump had threatened to have him ousted as chief executive and Mr. Lutnick had halted payments to Intel under a contract signed with the Biden administration.
“The whole thing strikes me as kind of a shakedown,” said Greg Mankiw, a Harvard economist who led the Council of Economic Advisers under President George W. Bush.
“It’s like when the mob comes to visit: ‘Nice business you have here, I wouldn’t want anything to happen to it,’” Mr. Mankiw said of the Intel deal and other corporate efforts to win the administration’s favor.
Mr. Trump has always brought unconventional ideas to government and envisioned his prowess at deal-making as being able to squeeze more out of negotiating partners than anyone else. In his first term, the president also leaned on companies in unorthodox ways — like asking for a payment to be made to the government as part of the U.S. acquisition of TikTok, which he called “key money,” a real estate term for a kickback.
Back then, Mr. Trump was surrounded by more traditional free-market advisers who worked to block his more unusual ideas, an effort that one former top official described as akin to strangling a baby in its crib. In his second term, Mr. Trump has padded his administration with advisers like Mr. Lutnick who are firmly devoted to the president and see their job as translating Mr. Trump’s whims and instincts into action.
Mr. Lutnick declined through a spokesman to be interviewed for this article. The Commerce Department and Intel did not provide a comment.
Kush Desai, a White House spokesman, said part of Mr. Trump’s “immense appeal and political success is that he’s willing to veer outside mainstream thinking to secure the best deal.” He added that Mr. Lutnick’s “history of private-sector success and out-of-the-box thinking has made him an invaluable asset.”
Mr. Lutnick was already interested in having the U.S. government take stakes in companies when he came into office, a person familiar with his thinking said. A New York billionaire, Mr. Lutnick has been particularly passionate about finding ways to monetize government operations. That includes levying tariffs, charging fees on university patents and selling U.S. residency to wealthy foreigners through Mr. Trump’s “gold card.”
Mr. Lutnick, who ran the brokerage firm Cantor Fitzgerald before joining the administration, had no prior government experience. He won a position at the helm of the nearly 50,000-person Commerce Department this year because of his hefty fund-raising for and devotion to Mr. Trump, as well as his long investment career and nontraditional ideas for transforming government.
Mr. Lutnick has said he came up with the idea for the Department of Government Efficiency, and suggested he would work to take in vast amounts of revenue to pay off U.S. debt. He has repeatedly expressed concerns about the country’s debt load and the fact that American assets today are heavily owned by foreigners.
Mr. Lutnick also sought greater control over the money the government is bringing in from Mr. Trump’s new tariffs, but his efforts have been blocked. The administration had suggested that Mr. Lutnick would head a new External Revenue Service, which would use tariff revenue to replace some taxes.
But officials at Customs and Border Protection, which handles tariff collection, fought Mr. Lutnick’s attempts to move that function into the Commerce Department, arguing that they were better equipped to do the job and that such a move would require an act of Congress, a person familiar with the matter said.
Mr. Lutnick and other administration officials also initially considered creating a sovereign wealth fund. Mr. Trump signed an executive order in February for his advisers to draw up a plan for one.
But that idea appeared to fall out of favor as officials came to terms with the fact that the United States, unlike most countries that run such funds, has vast amounts of debt rather than wealth. An administration official said Mr. Lutnick had concluded that revenues from a sovereign wealth fund would not be sufficient to reduce the national debt.
In recent months, Mr. Lutnick has instead refocused his efforts toward setting up what he describes as a “national and economic security fund” within his department, financed by the hundreds of billions of dollars that Japan and South Korea pledged to invest as part of their trade deals. He had the idea for creating the fund after meeting a delegation of Japanese businessmen at Mar-a-Lago at the beginning of Mr. Trump’s current term, when he became convinced that the Japanese would not open their markets to U.S. products, two people familiar with the matter said.
Mr. Lutnick had more than a dozen conversations with the Japanese, often staying in his suit late into the night to hold video calls from his French-chateau-style mansion in Washington, D.C., one of the people said. In July, Mr. Lutnick and other officials pitched the idea for the fund to the president in the Oval Office.
The president agreed, and shortly afterward announced that he had struck “the largest trade deal in history” with Japan. It would include a $550 billion investment, and 90 percent of the profits from the investments would go to the United States, he claimed.
Critics have questioned whether those hefty sums will ultimately materialize. The concessions that Mr. Lutnick made to secure those funds have also unsettled some industry executives, according to two people familiar with the situation. U.S. automakers and some White House officials believe that the 15 percent tariff the United States will charge on Japanese cars gives foreign automakers too much of an advantage over American brands.
Mr. Lutnick has talked about using the funding to invest in strategic industries in the United States, including potentially building factories that the government could lease back to companies for a fee. In an interview on CNBC on Friday, Mr. Lutnick said the funding would be used to bring “semiconductors home” and “build generic antibiotics in America.”
“This is the smartest deal that anybody has ever done,” he added.
Seeding the Investment Accelerator
At the crux of the investments Mr. Lutnick is negotiating is the Investment Accelerator. It was set up in March through an executive order as a concierge service for companies making high-dollar investments in the United States. Mr. Lutnick hired Michael Grimes, a lead tech banker at Morgan Stanley, and David Shapiro, a partner at Wachtell, Lipton, Rosen & Katz, to lead it.
The accelerator has assumed control of tens of billions of dollars from the 2022 CHIPS Act, a bipartisan bill aimed at building up U.S. semiconductor manufacturing. Companies signed contracts with the Biden administration to receive those grants, but Mr. Lutnick has paused many of the payments as he pushes firms to invest more in the United States.
It was that push that resulted in the government’s taking a stake in Intel. Other chip companies that were slated to receive large government grants, like Taiwan Semiconductor Manufacturing Corporation and Micron, have announced new investments in the United States in recent months. But Intel has struggled to carry through on its previously announced projects.
The government’s new relationship with Intel is causing concern among some companies, which worry they may be forced to do business with the chip giant on unprofitable terms. Biden officials who set up the program have questioned the wisdom of the deal, saying it may not do as much to shore up America’s domestic chip supply. Whereas the program was originally devised to dole out grants to Intel over a number of years as it hit milestones for producing more semiconductors in the United States, the Trump administration has given Intel the rest of its grant money upfront in exchange for the equity stake.
Some progressives, including Senator Bernie Sanders, independent of Vermont, have praised the move. But many Republicans and Democrats have criticized it as government interference in the private sector. Senator Rand Paul, Republican of Kentucky, has called the government’s stake in Intel a “step toward socialism.”
“This is an area that is potentially, absent good governance and good theories of the case, rife for mismanagement and favoritism,” said Peter Harrell, a nonresident fellow at the Carnegie Endowment for International Peace and a former Biden White House official.
It is not clear how many companies the U.S. government could ultimately seek to take equity in. Mr. Trump has suggested that the United States may buy stakes in “many more.” Mr. Lutnick has said the administration may take stakes in defense firms, while Scott Bessent, the Treasury secretary, has mentioned shipbuilding as a potential target.
So far, Mr. Lutnick has been involved in structuring the equity deal with MP Materials, and played a leading role in negotiating the “golden share” the government took in U.S. Steel after its acquisition by Nippon Steel.
Asked in what situations he might take stakes in companies in an interview with CNBC on Aug. 26, Mr. Lutnick said that if the U.S. government was “adding fundamental value to your business, I think it’s fair for Donald Trump to think about the American people.”
These actions come after many years of fading support for free-market orthodoxy. Both political parties have grown less critical of industrial policy and government presence in the market, as the United States struggles to revive its manufacturing sector and respond to economic threats from countries like China.
But Mr. Trump and Mr. Lutnick seem driven not by deep ideology about the role of government. Rather, those familiar with their thinking say, they are following their instincts to secure better deals than those done by the Biden administration, shore up government finances and try to rebuild American manufacturing.
Mr. Lutnick’s department is also leveraging its control over the export licenses American companies need to sell A.I. chips and other sensitive technology abroad. Mr. Lutnick appears to have clamped down on those licenses in part to try to sway negotiations with trading partners like South Korea and Taiwan, which have major chip companies that need the approval, as well as to persuade companies to invest more in the United States.
Those efforts, along with other bureaucratic delays, have caused the backlog of export licenses waiting for government approval to balloon into the thousands, according to people familiar with the process.
But the idea that has provoked the most criticism appears to be that of taking a cut of A.I. chip sales to China. The move would put the government in the position of benefiting financially from the sale of a product the Commerce Department is also charged with regulating for national security reasons.
Department lawyers have been studying the idea, but many officials and outside lawyers say it is not legally permitted.
The proposal has unsettled employees of the Bureau of Industry and Security, which polices chip sales to China. Asked about the move in an Aug. 19 town hall with employees of the bureau, Mr. Lutnick said the proposal was Mr. Trump’s idea, people familiar with the remarks said.
An administration official told The New York Times this month that the government’s topmost priority was national security and that it would not compromise on those concerns.
Ben Casselman and Lauren Hirsch contributed reporting.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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