U.S. Economic Policies and Corporate Engagement Under the Trump Administration in 2025
In 2025, President Trump's policies initiated various discussions among business and political commentators regarding their impact on U.S. free-market capitalism. Terms such as "state capitalism," "MAGA Marxism," and "crony capitalism" were utilized to describe these developments, highlighting a perceived integration of business and government functions.
Ann Lipton, a business law expert and professor at the University of Colorado, noted that government favoritism towards specific companies could distort the marketplace. She stated that such actions might reduce incentives for innovation among other firms, potentially impacting the functioning of a free market and the broader economy.
Government-Corporate Interactions
Evidence of direct government interaction with U.S. companies and investors emerged during the year. 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 a 10% stake in the tech company for the U.S. government. Intel did not provide a comment when requested.
Other technology CEOs also engaged with the administration. Jensen Huang, CEO of Nvidia, a significant company in the AI sector and a donor to President Trump's White House ballroom project, secured U.S. government permission to sell advanced semiconductor chips in China. This agreement included a provision for the U.S. government to receive a 25% cut of the sales. A spokesperson for Nvidia stated that President Trump's focus in discussions was on national security, American prosperity, and technology leadership.
Lipton characterized these interactions as a form of "capitalism by schmoozing," suggesting it could affect the competitiveness of U.S. businesses and, in the long term, the economy. She posited that if competition shifts from innovation to cultivation of political relationships, it could yield less optimal products and innovations.
Shifting Economic Models
Observers, including Lipton and various business insiders, suggested that the degree of President Trump's direct influence over private companies and the efforts by some companies to engage with him personally indicated a shift in the U.S. economy. This shift was described as moving away from free-market or "rules-based" capitalism, historically supported by businesses and Republicans, towards a government-controlled model sometimes termed "state capitalism" or "crony capitalism," where government influence, rather than market competition, shapes the economy.
Daniella Ballou-Aares, co-founder of the consulting firm Dalberg and head of the Leadership Now Project, stated that a departure from rules-based capitalism carries risks. A survey conducted by her group and The Harris Poll in October found that 84% of business leaders expressed concerns about the political and legal climate's impact on their companies.
In contrast, a White House official, speaking anonymously, described the narrative of President Trump reshaping capitalism as overstated, characterizing the administration's policies as largely consistent with traditional free-market policy-making from a Republican administration. The official denied accusations of "crony capitalism," stating that companies benefited from policies irrespective of their relationship with the administration. The official also noted that government ownership stakes or revenue-sharing deals primarily involved companies significant to economic and national security, such as Intel, Nvidia, U.S. Steel, and MP Materials (a rare-earth minerals mining company).
The official stated that these targeted interventions aimed to support free-market growth while addressing critical national interests.
Corporate Responses and Challenges
Following President Trump's election victory, businesses largely expressed satisfaction, partly due to perceptions of a stringent regulatory climate under the previous administration. Specific sectors, such as the "Magnificent Seven" tech companies, which are major contributors to the AI sector, appeared aligned with the administration's approach, according to Daniel Kinderman, a political science professor at the University of Delaware.
While some of President Trump's policies, including tariffs and changes to immigration for highly-skilled foreign workers, presented complexities for large tech companies, many CEOs avoided public criticism. Instead, some focused on supporting the President's personal projects; for example, Apple's Tim Cook reportedly presented President Trump with a plaque after promising a $600 billion investment in the United States, and Apple's iPhones were largely exempt from tariffs.
Kinderman observed that for powerful CEOs, direct engagement with President Trump could offer an efficient alternative to navigating federal regulatory processes. However, warnings were also issued regarding the potential risks of codependent relationships between political leaders and CEOs, citing examples from countries like Russia, Hungary, and China where such dynamics can lead to unfavorable outcomes for businesses.
Outside of the technology sector, many businesses expressed reservations about the economic policy shifts. Jeffrey Sonnenfeld, a Yale management professor, indicated that a majority of CEOs felt frustrated. Examples included the U.S. Chamber of Commerce suing the administration over increased H-1B visa fees, despite also acknowledging the administration's agenda. JPMorgan Chase CEO Jamie Dimon cited concerns about perceived favoritism when declining to contribute to the White House ballroom project.
Many businesses demonstrated reluctance to publicly criticize the administration, due to potential personal criticism, partisan boycotts, or financial repercussions. Drew DeLong, head of corporate statecraft for Kearney, described the corporate response as "tactical fire-fighting" amidst policy shifts, leading to "fatigue" and diverting resources from innovation.
Merger Review and Regulatory Control
The administration's approach to corporate mergers also drew scrutiny. The Federal Communications Commission (FCC) approved telecommunications mergers after Verizon and T-Mobile agreed to terminate internal diversity, equity, and inclusion (DEI) policies. The FCC also signaled potential federal action against ABC affiliates following comments made by Jimmy Kimmel on his late-night show, concurrent with some station owners seeking federal merger approvals.
Elizabeth Wilkins, former chief of staff to Lina Khan (former FTC chair), stated that "merger review has been utilized as a tool for control," fostering an environment of uncertainty and cautious communication among corporate leaders. An exception was noted for leaders with close ties to the President. The White House facilitated a deal for U.S. investors, including Trump ally Larry Ellison and his son David, to acquire TikTok's U.S. operations. This deal reportedly involved a multibillion-dollar payment to the federal government, a financial request described by some business experts as a "shakedown" or "extortion."
Some business experts anticipate that companies and executives may become more confident in challenging White House policies deemed detrimental to their operations or the wider economy, as the administration's approach becomes clearer. However, DeLong cautioned businesses to anticipate continued policy changes and economic uncertainty in the coming years.