Changing the Rules: Taking An Equity Stake in the Future
Part 2 of Financing a Manufacturing Renaissance
Bring the old rule book onto the ball field and argue with the umpire?! In the USA the until-now accepted and staid rules are being rewritten, as the actual Constitutional powers of the Executive Branch are fully flexed. This goes to the financing of the ongoing US national economic expansion, so hold onto your hat!
Singular major investments, to now be made by Japan, European Union and South Korea as part of recent tariff and trade negotiations, are case in point. Since when have foreign countries handed over to the President of the United States access to more than a trillion dollars to invest into the core industries of the USA?!?
In this Substack post, a concrete application of the President's novel foreign nation-funded investment vehicles is discussed. Then this post will return to the domestic side, and the emerging lending and investment policies of the Trump administration. Weighed is the special role of the Treasury's Federal Financing Bank in unleashing US energy production.
Consider, first, the South Korean tariff agreement, which includes investing $350 billion into the United States -- to be directed by the President of the USA. Very similar to the tariff agreement reached with Japan only days earlier (a $550 billion fund), the South Korean agreement is not "vague" or "murky," as reported in the befuddled - and otherwise lying - lame-stream media.
Commerce Secretary Lutnick is speaking of the almost $1 trillion agreed to by South Korea and Japan -- or much more if the European Union's promise of $600 billion were included -- as, "a national security economic fund ... to be managed by Donald Trump." There is red meat on the bone here, and the agreements are unprecedented. Lets look at the some of the implications
US Shipbuilding!
President Trump had signed a presidential executive order, titled Restoring America's Maritime Dominance, on April 9, 2025. In the just-signed US-South Korea tariff agreement, a reported $150 billion1 of South Korea's $350 billion investment into the US assets will be in a US-South Korea partnership for shipbuilding. That investment would be more than three times the total 2026 US Navy shipbuilding budget request, which outlines a plan to procure 19 battle-force ships, including investment in shipbuilding capacity.2
Is this pie-in-the-sky? Not at all; Houston-based Hanwha Shipping, part of South Korean parent company Hanwha Group, announced the first US order of an US LNG carrier in almost 5 decades. These very large, next-generation ships are used to transport liquid natural gas (LNG) in the export market, being some three football fields in length. The vessel, which will be US-crewed and US-flagged, will be built in Philadelphia at the Philly Shipyards, now Hanwha Philly Shipyards.
The announcement was made on July 23, just a week before President Trump reached an over-all tariff agreement with South Korea.
Remaking US Shipyards
Many Americans have rightfully wondered, "How, exactly, can US shipbuilding ever be revived?" In 2024, US shipyards built just 1% of the world's commercial ships; China's share of the global commercial shipbuilding rose to over 50%, and the combined share of South Korea and Japan shipyards accounted for some 42%.
Modern shipbuilding is high tech, borrowing much from the modular construction techniques & technical sophistication of modern commercial aircraft.
South Korea's "Big Three" shipyards are known for their technological expertise and ability to build complex, high-value ships, including LNG carriers, advanced tankers, and specialized offshore vessels. They have invested heavily in modularity, automation, robotics, and other advanced shipbuilding technologies to optimize production and efficiency.
Each ship module is complete with wiring for all electronics, plumbing and so forth before it is sent to the shipyard. Modules arrive in a synchronized ballet, each module at the right time and the right place -- and fit. The process is entirely orchestrated, from 'above,' at the inception of the project, utilizing advanced computer aided design and creation of a "digital twin" of the entire ship. Even so, a single LNG carrier takes 2 to 3 years to build.
Knowledge & Technology Transfer
Situated on a portion of the site of the storied Philadelphia Naval Shipyard, the Philly Shipyard has a history linked to US naval operations, but became primarily a commercial shipyard, delivering half of the larger ocean-going U.S. Jones Act commercial ships since 2000. (Under the Jones Act, only US built and crewed ships can move goods from one US port to another US port.)
Now however, US-based Hanwha Shipping, part of South Korean parent Hanwha Group, is the owner. Hanwha is intent,
"to transfer its advanced shipbuilding technologies to Hanwha Philly Shipyard, enabling the latter to expand into high-value shipbuilding. This LNG carrier order marks a significant milestone in contributing to the revitalization of the US shipbuilding and maritime sectors."3
Nor is Hanwha alone in committing to the US shipbuilding revival. Virginia-based shipbuilder HII (Huntington Ingalls Industries, Inc. the largest military shipbuilding company in the US) and another world-class South Korean shipbuilder, HD Hyundai Heavy Industries, signed a memorandum of understanding (MOU) that will enable the two companies to collaborate on “best practices,” ranging from robotics to advanced manufacturing. HD Hyundai Heavy Industry also has reported plans to invest with the Bill Gate's nuclear power venture, TerraPower, to develop advanced small modular reactor-powered ships by 2030.4
So almost overnight, the outlines of a vigorous US shipbuilding industry are coming into view, thanks to the unique initiatives and partnerships being organized by President Trump and his team.
Accomplishing the revival of US shipbuilding will also take a lot of American ingenuity and American optimism. The rebuilding of multiple US shipyards, and the contracts for the next-generation ships that will finance and sustain them, will take resources and skilled manpower. US maritime dominance itself is boldly premised on the expectation that the US will once again regain a global capital goods export role, one not seen since the 1960's. That American capital goods export role will also drive and benefit a new, expanding world community of truly sovereign nation states.
Organizing Our Partners to Now Invest in America
What President Trump and his growing team - both in government but also equally in the private sector -- are doing, is transforming the US economy, and indirectly the world economy, by all the means available. Foreign capital will now leverage broader US domestic capital and workforce investment.
While utilizing the USA's position, as currently the world largest market for foreign goods, to achieve a remarkable reversal of the US $1 trillion/year trade deficit, the administration and private sector collaborators are drawing trading partners into investing and lending trillions of dollars into the US's -- currently capital-starved -- "strategic industrial base." Japan's Prime Minister Shigeru Ishiba clearly explained to the Japanese people that Japan, through the new $550 billion investment vehicle, will be investing into "US core industries." Profits, by agreement, will largely be plowed back into the US industrial base.
To recognize the dimensions, the reader must combine this defacto "national security wealth fund" (Commerce Secretary Howard Lutnick's term) with the approximate $7 trillion in new domestic and foreign direct investments (FDI) announced over the first 100 days of the new administration.5 Nor have these commitments stopped coming! Secretary Lutnick estimates that these announced domestic and foreign investment commitments now top $10 trillion. As President Trump himself keeps reporting, before the US was dead; now it is HOT!
Growth of Production Not Finance
Part 1 of this 2-part substack post discussed the range of Trump administration federal financing initiatives that are now being laser-focused to accelerate investments into the energy, industrial, and manufacturing core of the US economy. So far in Part II there has been a discussion of new investment vehicles, involving the Japan, EU and South Korea.6
Now, the remaining portion of this Substack post turns back to the emerging picture of US domestic financing that is beginning to drive the US economy.
A Race Against Time
A national energy emergency was declared on January 20th, on President Trump's first day in office. In that seminal Executive Order and those that followed, the Defense Production Act Title III, the Department of Energy, the Department of Defense Office of Strategic Capital, and other facilities were cited as the means of infusing low-cost loans, loans guarantees and capital - including in the form of federal equity stakes -- into the economic heart of the nation. These are tools in the tool box that President Trump's executive orders have already singled out for use.
Passing the One Big Beautiful Bill (OBBB) was incredibly important and the results are only beginning to be positively felt. The traitors and fools opposing the OBBB wanted to stop everything and focus everyone obsessively on cutting federal spending - just as the nation started climbing out of a deep hole. Those efforts rightfully failed, largely because Americans got a whiff of what was up.
Just six months into the Administration, inflation is now tamed and initial growth and wage figures are above expectations and more Executive Branch initiatives are in the works. The Environmental Protection Agency, under EPA Administrator Lee Zeldin, is rescinding the Obama-era "endangerment finding" emissions rule which, "let the agency essentially regulate parts of the US economy out of existence." Federal equity stakes in critical companies are being made, as in rare-earth mining processing such as MP Materials at Mountain Pass, CA. Interior’s Doug Bergum and Kelly Loefler of the Small Business Administration is just two of President Trump’s Cabinet members that have singled out federal equity stakes as an important tool, in areas critical to the nation’s security.
The broad need for big capital investment into energy, infrastructure, industry, manufacturing and housing is why President Trump, as well as Scott Bessent and Bill Pulte, are demanding that "Too-Late Jerome" Powell immediately lower the Federal Reserve Funds Rate, "by 3 points."
This figure should not be taken as aspirational. Not only a trillion or more dollars a year would be saved in interest rate payments on Treasuries, as President Trump is rightfully emphasizing, but now much, much more.
It is vital to recognize that such a reduction in interest rates would then lower the "cost of borrowing" for private sector investors, including for Federal Finance Bank (FFB) co-financed five- and ten-year energy and infrastructure projects. It would make many more of them profitable under new "market conditions."
At this very moment when tremendous new foreign investments are being committed for energy, industry, manufacturing and supply chains, including through the tariff agreements with Japan, EU, and South Korea, the further step in capital formation in industry and infrastructure will come from the US financial markets. Foreign infusions are already pulling additional capital off of America's cancer-ridden, financialized Wall Street.
Priming the Pump & Sharing Risk
The Pennsylvania Energy and Innovation Summit of mid-July (reported on here, in this writer's last two Substack posts) already indicates that private sector investors and entrepreneurs positively recognize that the rules have dramatically changed!
Of the ninety-two billion dollars in new investments announced at the July 15th Pennsylvania Innovation Summit, well over $50 billion is in energy projects, ranging from hydro and natural gas to nuclear power. Clearly these leading CEO's and policy makers had more than an inkling of an entirely transformed investment market. They are choosing to join-in and make it happen! Many of their projects will be built out by American labor over an extended period of years. Across America, such projects had become virtually extinct!
As this writer often emphasizes, there is today $7 trillion sloshing around in money market mutual funds on any given day. From banks as well, more capital could also become available, for example through modification of Supplementary Leverage Ratio (SLR) requirements that would free up reserves for productive nvestment. The Federal Reserve is also paying interest to banks for well over a trillion dollars parked in Fed master accounts, capital that should be private capital invested into significant longterm infrastructure and manufacturing projects.
Importantly, a significant drop in interest rates would now make generous federal loan financing and loan guarantees for such big, five and ten year investments even more appealing to private sector utilities, to industry and manufacturers, and their construction companies. This would be alongside the positive effects of falling Fed interest rates on commercial bank loan rates.
The Federal Financing Bank
There is another big tool in the tool chest, so big it is usually overlooked.
Established under the Federal Financing Bank Act of 1973, the Federal Financing Bank (FFB)7 is a government corporation that provides loans or loan guarantees to federal agencies and programs, not the public. The Federal Financing Bank borrows from the US Treasury and uses these funds to make loans to federal agencies that are tasked by Congress to execute programs.
For example, the Federal Financing Bank (FFB) role can be pivotal in scaling financing to meet the USA’s new ambitious goals of building hundreds of American nuclear power plants, and other much needed baseload power capacity.8
Indeed, what makes federal lending programs today possible, to partner with the private sector and state governments, is the Federal Financing Bank and the FFB resides within the Department of Treasury. The reduction of Federal Reserve interest rates will further reduce these program costs.
The lending capacities of the FFB can also be quite expansive!
If You Don't Like the Market, Change It.
The President's powers, under his Executive Order, Declaring a National Energy Emergency, may be sufficient to accomplish an expanded use of the Federal Financing Bank in this emergency. https://www.whitehouse.gov/presidential-actions/2025/01/declaring-a-national-energy-emergency/
Further, the President's Executive Order 14154, Unleashing American Energy could be cited to direct the Federal Financing Bank (FFB) to prioritize nuclear projects,streamlining approvals, and expand lending through existing authorities such as the Department of Energy's Loan Program Office (LPO).
The FFB’s capacities could also allow a loan program such as the the DOE's Loan Program Office (LPO) to secure or issue larger loans or loan guarantees for borrowers, without sole reliance on congressionally appropriated funds. The congress passed the Infrastructure Investment and Jobs Act (IIJA) in 2021 and therein authorized the LPO to borrow from the FFB for needed transmission projects, beyond congress' specific appropriation to that program.9
The FFB could now be tapped to support expansive nuclear energy and other critically needed baseload energy initiatives. Certainly this potential is being considered by the Trump administration, just as the use of the Defense Production Act, for example.
The FFB was actually established to centralize and reduce the cost of federal borrowing, as well as provide federal assistance to nationally important projects and their private sector, state and local government participants in borrowing from the public, including from commercial banks.
Nuclear Power: Now Unleashing American Science
To date, the Trump administration's FY 2026 proposed budget [note] allocates Federal Finance Bank (FFB)-backed loans for nuclear ($5.25 billion) and the transmission grid ($6.1 billion). This is through the DOE's Loan Program Office. The $5.25 billion is under the LPO's "Advanced Technology Vehicles Manufacturing (ATVM)" program, supported by Inflation Reduction Act (IRA) authority -- but now judo-ed to focus on nuclear and other baseload power projects, not the Electric Vehicle lending that 'Biden' collective intended! Under the proposed 2026 FY budget there is also $750 million requested for credit subsidy financing. This financing covers federal loan guarantee costs for big projects.
Further, Westinghouse Nuclear is now in detailed discussions with the DOE's Loan Programs Office, to partner on Westinghouse's announced intention to have ten AP-1000 nuclear power plants under construction by 2030 — as called for in the President's Executive Order, Reinvigorating the Nuclear Industrial Base.
Beautiful (Clean) Coal
Incredibly, under 'Biden,' the DOE Loan Program Office's lending capacity topped $412 billion across all programs, as 'Biden' and congress pumped Inflation Reduction Act (IRA) and Infrastructure Investment and Jobs Act (IIJA) monies into it for insane "green" projects.
Even more astounding is that there is still $300 billion in uncommitted monies in that kitty, and the Republican-controlled Congress voted this year to keep those LPO funds in play -- but now for actual productive use. A President's EO, designated Steelmaking Coal a Critical Material and Mineral, and that designation will be included in the Department of Energy's own 2025 Critical Materials Assessment.
Here, once again, it is $200 billion from the Department of Energy's Loan Program Office -- this time it's Energy Infrastructure Reinvestment (EIR) program -- that is being tapped.10 Now the LPO is sparking a rebuild of coal and related energy infrastructure and supply chain investments, serving as a 'force multiplier' leveraging private sector investment. The LPO office is now officially engaged in "pre-application consultations," welcoming any and all comers involved in the mining, processing and use of coal!
The Department of Energy has firmly committed to facilitating New Investment in Coal-Powered Electricity Generation as well. The FY 2026 Budget as well provides $595 million for the Office of Fossil Energy, restoring the office’s central function of supporting the production of fossil energy, including coal, oil, gas, and critical minerals for the U.S.
Conclusion
"When the government spends money, it is taking it away from the people who earned it and using it less efficiently than they would.” That quip, made by the actually satanic Milton Friedman, is one that many Americans might first agree with, but then recognize the problem.
We have to now separate the wheat from the chaff. When the local government spends tax dollars to build and maintain fresh water and sewer systems; when their country spent for a national highway system or defense in time of war; when the nation spends to open a new frontier beyond the reach of private capital, as when the USA unleashed the revolution of nuclear science and energy, then those government expenditures are shown to be of the highest use and value. Those investments serve the general welfare. It is how Americans (and mankind) went successfully to the Moon and back, with spillover breakthroughs in so many fields of endeavor that it meant the Apollo space program cost our nation less than nothing. These projects add; they don't take away.
Americans increasingly recognize that President Trump is intent on utilizing the actual power of their government to do great things, to grow the nation out of an horrific moral and physical decline. The subordination of finance to the general welfare of the nation is the American System, and that is what President Donald J. Trump is set on. This is the elimination of the power of the financial oligarchy itself. Whether through his Executive Orders, tariff negotiations, new collaborative investment funds with partnering countries, or wielding the power of federal lending, loan guarantee and equity investments, serving the general welfare is this President’s intent.
New Supreme Court rulings and fresh congressional initiatives are also now playing important Constitutional roles, to bring the United States directly back to the dirigist, nation-building policies of the nation's greatest forefathers. The Executive powers of the presidency, under the Constitution, are being recognized; President Trump's transformative Executive Orders are also now being codified into law through legislation.
Decisive leadership is positively reshaping American life. This includes through deep rule-making reforms, the removal of the satanic "global warming" mantra, and now moves to effectively "federalize" the Federal Reserve. Throw out your old rule book!
https://www.japantimes.co.jp/business/2025/07/31/markets/trump-tariff-south-korean-imports/
An estimated cost of $47.3 - $47.4 billion. https://www.navytimes.com/news/pentagon-congress/2025/06/26/navy-budget-seeks-to-boost-modernization-of-fleet-shipyards/ ]
https://www.hanwha.com/newsroom/news/press-releases/hanwha-shipping-orders-lng-carrier-from-hanwha-philly-shipyard.do Hanhua Group purchased Daewoo Shipbuilding and Marine Engineering, one of South Korea's "Big Three" ship builders, in 2023. Daewoo Shipbuilding is now rebranded "Hanwha Ocean." Hanwha Ocean is already providing ship maintenance, repair, and overhaul for the US Navy in Philadelphia after its acquisition of Philly Shipyard.
Regarding needed new next-gen icebreakers, Canada’s shipbuilding group Davie has announced that it will acquire facilities in Galveston and Port Arthur, Texas from Gulf Cooper & Manufacturing. It previously acquired Helsinki Shipyard of Finland, which has built half of all icebreakers globally. “We share a vision with Gulf Cooper to make Texas a world-class hub for American icebreaker and complex ship production,” said James Davies, President and CEO of Davie. https://maritime-executive.com/article/davie-to-acquire-texas-shipyards-as-it-postures-for-u-s-icebreakers ]
https://www.whitehouse.gov/articles/2025/04/100-days-of-investment-5-trillion-in-new-investment-fuels-americas-future/
The writer has set to one side the European Union's agreement to invest $600 billion as part of its tariff agreement with the US. As the EU is, at this moment, a virtual Tower of Babble, it was thought best to wait a bit longer before making a considered assessment!
https://ffb.treasury.gov/ and https://ffb.treasury.gov/assets/files/AnnualReport2024.pdf
Indeed think tanks and former Fed officials have been considering the use of the FBB to finance "green" supply chains: https://carnegieendowment.org/research/2025/02/how-the-federal-financing-bank-could-strengthen-clean-energy-supply-chains?lang=en
The IIJA broadened the scope of the LPO's Title 17 Clean Energy Financing Program, including loan guarantees for projects that support energy infrastructure reinvestment. Further, under the IIJA and LPO's Title 17 program, borrowers can secure direct loans from the FFB, which are in turn guaranteed by the Department of Energy. https://www.energy.gov/lpo/articles/t17-downloadable-handout-overview?nrg_redirect=473100 ]
https://www.energy.gov/articles/energy-department-acts-unleash-american-coal-strengthening-coal-technology-and-securing