In 2025, business and political commentators employed various terms, including 'state capitalism,' 'MAGA Marxism,' and 'crony capitalism,' to characterize the influence of President Trump's policies on U.S. free-market capitalism. These terms, despite definitional variations, highlighted observed shifts in the relationship between businesses and the government, prompting discussions about potential long-term consequences for the U.S. economy and its international position.
Ann Lipton, a business law expert and professor at the University of Colorado's law school, stated that government favoritism towards specific companies could distort the marketplace. She suggested this could reduce incentives for innovation among other firms, potentially impacting the functioning of a free market and the economy.
Government-Business Interactions
During the year, observed interactions involved President Trump making public statements regarding certain U.S. companies and investors. In August, President Trump publicly called for the resignation of Intel CEO Lip-Bu Tan. Following a meeting at the White House, Tan agreed to provide the U.S. government with a 10% stake in Intel.
Other technology CEOs also engaged with the Trump administration throughout the year. Nvidia CEO Jensen Huang, head of a significant global company, was noted among donors supporting a White House ballroom project. In the current month, President Trump announced that the U.S. would permit Nvidia to sell an advanced semiconductor chip in China, with the condition that the U.S. government receive a 25% share of the sales.
Lipton characterized this approach as 'capitalism by schmoozing,' cautioning that it might negatively affect the competitiveness of U.S. businesses and the long-term economy. She articulated concerns that such practices could hinder innovation and product development, suggesting that competition based on personal influence would be detrimental.
Intel did not provide a comment when contacted. A spokesperson for Nvidia stated via email that President Trump's focus in discussions was on national success, protection of national security, American prosperity, and technological leadership.
Policy Shifts and Economic Models
While business leaders have historically engaged with presidential administrations, Lipton and other business observers across the political spectrum suggested that President Trump's direct involvement with private companies in the current year, alongside efforts by some company leaders to engage with him personally, indicated a shift away from traditional free-market or rules-based capitalism. This traditional system has been supported by businesses and Republicans, and is associated with the historical development of the United States as a leading global economy.
According to some business insiders, current policies were initiating a 'state capitalism' approach, characterized by government influence over the economy rather than private sector competition. Others termed this 'crony capitalism,' describing a system where government decisions on businesses were perceived as influenced by presidential relationships. Daniella Ballou-Aares, co-founder of Dalberg and head of the Leadership Now Project, expressed that a deviation from rules-based capitalism, historically contributing to the U.S. economy's strength, carried risks. In October, a survey conducted by her group and The Harris Poll indicated that 84% of business leaders expressed concern regarding the impact of the current political and legal climate on their companies.
Administration's Response
An unnamed White House official characterized the narrative regarding President Trump's reshaping of capitalism as 'significantly overstated,' asserting that the policies were largely consistent with 'traditional free-market policy-making expected from a Republican Administration.' The official refuted claims of 'crony capitalism,' stating that some companies benefited from the policies irrespective of their relationship with the administration.
The official also highlighted that the U.S. government had pursued ownership stakes or revenue-sharing agreements primarily with companies deemed critical to economic and national security, such as Intel and Nvidia, which are involved in semiconductor production for artificial intelligence. U.S. Steel and MP Materials, a rare-earth minerals company, were also cited among those with government interests. The official articulated the administration's intent as embracing the free market and its growth potential, while implementing targeted interventions in areas of significant national interest.
Corporate Perspectives and Challenges
Businesses broadly responded positively to President Trump's election victory the previous year, with some attributing this to perceived regulatory challenges during the preceding administration. Segments of the business community, particularly leaders of major technology companies involved in the artificial intelligence sector, expressed satisfaction with the administration's initial year. Daniel Kinderman, a political science professor at the University of Delaware researching 'authoritarian capitalism,' stated that major technology companies and the Trump administration largely aligned on certain objectives.
While some of President Trump's policies, such as tariffs and adjustments to highly-skilled foreign worker immigration, presented complexities for large technology companies, many tech CEOs generally refrained from public criticism. Instead, they focused on contributions to projects associated with the President. For instance, Apple CEO Tim Cook presented President Trump with an item and announced a $600 billion investment commitment in the United States by his company. Apple's iPhones were notably excluded from certain tariff implementations. Apple did not provide a comment.
Kinderman noted that for some CEOs, direct engagement with President Trump could offer an alternative to navigating established federal regulatory processes. He added that these companies represent a substantial segment of the American economy, suggesting the administration largely met their objectives. However, Kinderman and others have cautioned that extensive interdependence between political leaders and corporate executives has, in some instances, led to unfavorable outcomes for companies. In some countries with state-controlled capitalism, such as Russia, Hungary, and China, political leaders maintain significant influence over private businesses. This can involve relationships with prominent business leaders, who may experience rapid changes in their standing. Ballou-Aares cited the example of Jack Ma, founder of Alibaba, who, after publicly criticizing China's financial regulations, experienced a period of reduced public visibility. She concluded that systems labeled as 'crony capitalism' generally do not benefit most companies long-term, referencing Ma's situation as an illustration.
Beyond the technology sector, some businesses expressed mixed views regarding the impact of the administration's policies on U.S. capitalism. Legal challenges were initiated by some companies against the administration concerning tariffs and immigration policies. Jeffrey Sonnenfeld, a Yale management professor, stated that while some technology leaders engaged closely with the administration, most CEOs expressed frustration with the prevailing situation.
Instances of corporate frustration became more apparent. The U.S. Chamber of Commerce filed a lawsuit against the administration regarding proposed fees for H-1B visas for highly-skilled foreign workers, while simultaneously commending the administration's broader agenda. Jamie Dimon, CEO of JPMorgan Chase, explained to CNN why his company did not contribute to a White House ballroom project. Dimon stated that due to JPMorgan Chase's global government contracts, the company maintained caution regarding perceptions of its actions, citing concerns about potential implications of appearing to seek favors.
However, public criticism of President Trump's policies from most businesses remained limited. Smaller companies often lacked the capacity to challenge the administration effectively, and even leaders of large corporations expressed reluctance to face potential public criticism or associated negative consequences. Many businesses prioritize commercial operations, necessitating adaptation to significant policy changes such as tariffs. Drew DeLong, head of corporate statecraft at Kearney and a former State Department official during the first Trump administration, described the situation for businesses as 'tactical fire-fighting.' DeLong noted that resources allocated to tariff mitigation reduced time available for innovation, indicating both an urgent need for adaptation and a sense of strain.
Regulatory Scrutiny
The Trump Administration's approach to corporate merger approvals received scrutiny due to the intersection of political and business factors. Examples included Federal Communications Commission (FCC) approvals for telecommunications mergers, which occurred after Verizon and T-Mobile agreed to discontinue certain diversity, equity, and inclusion (DEI) policies. The FCC also reportedly considered federal action against some ABC affiliates regarding a late-night show's commentary; the owners of these stations were simultaneously pursuing federal merger approvals. ABC parent Walt Disney temporarily suspended the show before its reinstatement, and ABC did not respond to comment requests.
Elizabeth Wilkins, former chief of staff to a previous Federal Trade Commission chair, stated that merger review had been utilized as a control mechanism. Wilkins, now head of the Roosevelt Institute, added that such regulatory conditions contributed to an environment of uncertainty among corporate leaders.
An instance highlighting close ties involved the White House facilitating a deal for U.S. investors to acquire TikTok's U.S. operations. This transaction included a substantial payment to the federal government, which some business experts termed a 'shakedown' or 'extortion.' Some investors involved, including Larry Ellison and his son David, were reportedly pursuing additional media acquisitions.
Some business experts anticipated that increased understanding of the administration's approach might lead more companies and executives to challenge White House policies perceived as detrimental to their businesses and the broader economy. Ballou-Aares commented that the administration's policy approach was widely viewed as unpopular, including within the business sector. DeLong cautioned businesses to anticipate further policy changes and ongoing economic uncertainty. He concluded by emphasizing that this was only the first year of the administration, raising questions about future policy directions and economic conditions.