Why Trump’s $15 billion Automotive equity strategy isn’t really like China’s — and that might be the bigger problem

The Trump administration's equity stakes echo China's model, but lack the coordination and patience to execute it effectively — a gap that threatens automotive supply chains.

The New York Times reports the Trump administration has committed $US10 billion ($15 billion) in equity stakes across nine companies in steel, minerals, semiconductors and nuclear energy – primarily to reduce reliance on Chinese imports critical for vehicle production. The rapid dealmaking raises questions about due diligence, with investments made in weeks rather than months.

Concerning for automakers: stakes in rare earth miners and rare earth magnet producers threaten future supply chain vulnerabilities if government picks underperforming companies expecting equity returns that may never materialise.

Our take:

Our first reaction was to wonder if there are any parallels that can be drawn between this US government strategy and the way China's government works