By Ross Kerber

July 8 (Reuters) - The opinions expressed in this column are those of the author, a correspondent for Reuters.

U.S. President Donald Trump's administration likes to throw its weight around in dealings with Corporate America, as the CEOs of Intel, Nvidia and U.S. Steel can attest.

Now the biggest players in the asset management industry will learn more about their own freedom of action after the U.S. Treasury on July 2 named them to run money for the new "Trump Accounts." Under the savings program the government will deposit $1,000, meant as seed money, into an investment account for each U.S. newborn.

Initially, all contributions to the program will be invested in the State Street SPDR Portfolio S&P 500 ETF SPYM.P with other ETFs the firm and rivals BlackRock and Vanguard to be eligible later.

On the surface the three firms look like obvious selections. Known as the "Big 3," they dominate their industry with low-cost index funds and run a collective $33 trillion.

The State Street ETF alone has some $157 billion and a very cheap 0.02% expense ratio, not to mention a high rating from Morningstar. That's far below the 0.1% expense ratio for the accounts called for by law, for instance.

ASSETS = LEVERAGE

But deals with Trump often go beyond dollars and cents, as the semiconductor and steelmaker firms found out. Fund firms also felt some heat after Trump took back the White House and fired off a series of executive orders putting environmental, social and governance(ESG) efforts under scrutiny, including the role of proxy advisers.

In February, Vanguard agreed to pay $29.5 million to settle a Texas lawsuit that was backed by the Trump administration, which claimed that Vanguard violated antitrust law through its climate activism. BlackRock and State Street are still fighting the allegations. All three firms have rolled out programs giving investors some say over how their funds cast proxy votes.

Going forward, keep an eye on how the Trump administration may seek to influence those votes via its new Trump Account lever. Currently the State Street ETF's votes are run by its stewardship team, according to a fund disclosure.

The document states that the company "focuses on risks and opportunities that may impact long-term value creation for our clients. " For instance, for companies identifying climate change as material risks or opportunities, State Street says it would expect the company to spell those out in line with local or industry standards.

It's easy to imagine the policy running afoul of Trump's April 8, 2025 executive order directing federal officials to stop enforcing certain state climate laws. In such cases, would the Treasury Department seek to influence how State Street votes its proxies at annual meetings of fossil fuel companies?

STAY TUNED

When I asked the Treasury Department all this, a spokeswoman told me: “More information will be available with upcoming vote notifications, but voting rights of shares held in Trump Accounts will not be controlled by proxy advisors."

State Street did not directly address questions about relations with the Trump administration.

A spokesperson for State Street's investment management arm said via e-mail that it is "committed to facilitating voter choice for our clients. We make a number of voting policy choices available to our clients and we implement those policies based on the direction our clients provide to us.”

A Vanguard spokesman declined to comment.

A BlackRock representative referred questions to the Treasury Department.

Lindsey Stewart, Morningstar director of institutional insights, said there was a potential conflict of interest for fund firms that now will be voting with an eye on the Trump administration's views.

While the firms likely have robust governance arrangements for these circumstances, he said via e-mail, "it will still be worth keeping an eye on any changes in these funds' voting approach."