Instead of “firing up” or improving American capitalism, President Trump is firing or humbling America’s CEOs. Instead of continuing or improving the capitalism that energized America for 250 years, Trump is transforming it into some version of state capitalism.
Wikipedia defines state capitalism as “An economic system in which the state acts as a dominant market player—owning or controlling enterprises, allocating capital, and pursuing profits—while using markets and business methods to advance political objectives as well as economic ones.”
In state capitalism, the government operates like a large corporation with subsidiaries or a controlling shareholder. It uses the power of the State to intervene in corporate decisions. It creates sovereign wealth funds, controls credit and investment, and uses its political muscle to enforce financial goals, and dictates winners and losers.
The shift toward state capitalism did not come out of the blue. It has gained popularity because many Americans felt they were left out of the economy or would be in the future. The Rust Belt, fossil fuel-dominated states, and rural areas have become so frustrated that they were willing to sacrifice our commitment to American capitalism. Their frustration led to the election of an avowed autocrat who promised to convert the economy into a top-down, state-managed economy. The most ardent of the MAGA horde are eager to use the power of the State to punish those elements of the economy they believe have punished them.
Most Libertarian-leaning Trump voters have in the past insisted on the principles of minimal State control, personal sovereignty, liberty, and free-market, “pure” market capitalism. However, there is no “pure” capitalism in the real world. Moreover, they may have some soul-searching for supporting Trump’s continual and blatant violations of their core principles. Historically, in America, as elsewhere, capitalism has existed within a mixed control economy. Uncontrolled market capitalism inevitably leads to societal conflict and ultimately to revolution. Without some intervention by the state, “pure” capitalism would lead to chaotic markets, the lack of public goods, more extreme poverty, and other dystopian results. However, Trump’s version of state capitalism should be anathema to the tortured supporters of Libertarianism.
A more extreme example of political/economic control is communism. Communism is a command economy that controls every aspect of the economy and society. Although China still has elements of both capitalism and communism, its economy is more like state capitalism. China’s old-fashioned Communism controlled the economy even in local areas from a central bureaucracy, but the modern versions in China allow some degree of local autonomy. Russia has some aspects of capitalism, but in reality, it is an autocratic kleptocracy controlled by a criminal regime.
What is the evidence that Trump is transforming American capitalism into a Chinese version of “capitalism”?
A Wall Street Journal article updated on August 11, 2025, by Greg Ip is entitled, “The U.S. Marches Toward State Capitalism With American Characteristics”. The author’s first sentence is “A generation ago, conventional wisdom held that as China liberalized, its economy would come to resemble America’s. Instead, capitalism in America is starting to look like China.”
There are many examples of Trump’s attempt to convert the U.S. economy to State control. Among them are:
- Trump’s unilateral, chaotic, and unintelligible imposition of tariffs on foreign goods is the prime example of his Executive Branch’s overreach and its push towards state capitalism. There is no need to dissect this nutty exercise in futility completely. Wall Street investors quickly understood that Trump’s actions were 99% bluster and that he would back down when faced with inevitable pushback. They called him the TACO (Trump Always Chickens Out) president. He would set FIRM deadlines. A few countries would seem to capitulate to Trump’s demands, while the vast number of countries would ignore them. When the deadline passed, he would randomly raise or lower the tariffs and then issue new FIRM deadlines. There is no need to beat this dead horse. To any objective person on Earth, Trump’s ongoing tariff fiasco is a clown show. He is our TACO president. Every leader of every major country knows this. The only people ignorant of or complicit with this fact are his MAGA defenders.
- Has there ever been a U.S. president who overtly interfered with American corporations to the extent of Trump? His ongoing culture war against the opponents of MAGA has entered a new phase. Many of his conflicts with corporations are not based on anything other than the culture war. If a corporation chooses to market to minority cultures, sorry! The Trump government will use the STATE to penalize any corporation that is LGBTQ+ friendly. Implicit in the Trump position is that the State should control values and morality. Will corporations be forced to post the Ten Commandments on their corporate websites? America was founded on the separation of church and state. Not only is Trump trying to destroy this separation, but logically, he is likely to force Christian Nationalism on corporations. Trump forced Paramount (e.g., CBS, Comedy Central) to bend to his political will over their various free-speech attacks and satire. Paramount is in the final stages of merging with Skydance, a company controlled by Larry Ellison’s son. This merger needed Trump’s approval. Paramount caved to the will of Trump.
- Instead of allowing corporations to make their deals, Trump interfered with the Nippon Steel-U.S. Steel deal.
- Trump determined most of the winners and losers in his new State-controlled tariff and international controls. In many cases, it is difficult to determine whether Trump is moving America to a State-controlled economy or simply a klepto-economy ruled by a group of Trump’s favorites. The simple fact is that corporations with CEOs with Republican donation histories received better treatment under Trump’s new State-controlled economy. This is nothing new, but the brazenness and he extent is breathtaking.
- When was the last time a rogue’s gallery of CEOs stood directly behind the president during his inauguration? To name a few: Elon Musk (DOGE, SpaceX, and Tesla), Mark Zuckerberg (Meta/Facebook), Jeff Bezos (Amazon), Sundar Pichai (Google), Tim Cook (Apple), Shou Zi Chem (TikTok), etc. I think it was called “Pay to Play” in the news.
- Didn’t Congress, in a bipartisan fashion, and the U.S. Supreme Court confirm the order for TikTok to divest by January 2025? Not only has Trump flouted the order, but he also accepted funds from Shou Zi Chem to attend his inauguration. TikTok is still operating in the U.S. despite the bipartisan “ban”. Where is the MAGA outrage? The Trump suppression of the Epstein files proves that MAGA is incapable of outrage. They have drunk the orange Kool-Aid. They will support Trump even if he shoots and kills their father on Fifth Avenue in New York City.
- Trump recently called for the ouster of the Intel CEO after seeing something on Fox Business.
- When maps or statistics do not match Trump’s reality, he reacts like Pavlov’s dog. When a news channel didn’t agree that the Gulf of Mexico is really the Gulf of America, he banned reporters from that outlet. When his unemployment numbers moved south of the Gulf of Mexico, he fired the head of the Bureau of Labor Statistics.
- The very conservative Wall Street Journal has begun to notice Trump’s turn toward state capitalism and kleptocracy. Their editorial board has criticized Trump acting as a huckster in selling $Trump brand crypto coins.
The bottom line is that Trump acts like a three-year-old. He will continue to push his impulsive bad-boy limits until someone stops him. No one in the Republican Party is correcting this wobbly 79-year-old. The Republican Party (in the House, Senate, Supreme Court, and Executive Branch) is letting a three-year-old organized crime boss control the country.
MAGA defenders are likely to disagree. They will say that the Democratic Party does the same thing. They will say that Democrats favor clean energy, technology, education, health care, and organized labor, while treating fossil fuels, tobacco, coal, and other extractive industries less favorably. Truly, there are differences, but which socio-economic decision cluster is better for America in the long run? If climate change continues, what will today’s 30-year-old Trump voter tell his grandchildren in 2065? Will he say, “I’m sorry about your future. I didn’t realize that the oceans would rise and that you would be forced to move to Fairbanks, Alaska, because its summertime temperature of 90 degrees is the lowest in the USA.”
Corporations are transactional, just like Trump. They can literally be bought and sold, just like Trump. When will American corporations, traditional Republicans, and Trump-voting independents notice that Trump is turning the economy into, at best, a form of state capitalism like China, and, worst, a Russian version of a kleptocracy?
The main difference between Trump’s state capitalism and Xi Jinping’s version is that Trump’s approach is chaotic, divisive, and highly personalized, while Xi’s model is more rational, coherent, and institutionalized. If America continues down the road to a State-interventionist economy, who do you think will win?