In a dramatic departure from the principles of free-market capitalism, the Trump administration is quietly constructing a corporate state where politically connected companies receive unprecedented government favors in exchange for advancing White House political objectives. This emerging system of crony corporatism represents the most significant transformation of American economic policy in generations, replacing competitive markets with government-directed corporate partnerships that benefit both political leaders and their favored business allies. As the administration pressures companies across nearly 30 industries to strike deals that advance what it calls "national and economic security goals," America stands at a dangerous crossroads where the line between corporate boardrooms and government agencies is being systematically erased in a mad rush to secure political victories before the 2026 midterm elections.

Key points:

The Trump administration is pursuing deals across semiconductors, AI, pharmaceuticals, critical minerals, and numerous other sectors, offering tariff relief, revenue guarantees, and government equity stakes in exchange for corporate cooperation.

Commerce Secretary Howard Lutnick has emerged as the administration's lead deal-maker, openly declaring "if we're going to give you the money, we want a piece of the action"

A little-known federal agency, the International Development Finance Corporation, seeks a massive expansion to $250 billion in financing power to create an equity fund for strategic sectors.

Pharmaceutical executives receive near-daily calls from White House staff demanding production changes and political cooperation.

Companies learn that political optics are as important as business fundamentals, with Eli Lilly facing administration wrath for announcing new manufacturing plants without including Trump.

The administration uses multiple funding mechanisms including $550 billion from Japan's trade agreement and converted CHIPS Act grants to finance its corporate partnerships.

The birth of American corporatism

The framework now taking shape represents a fundamental reordering of the relationship between government and private enterprise. What administration officials describe as a "whole-of-government approach" to deal-making bears striking resemblance to the corporatist models that have historically characterized authoritarian economic systems. Under this arrangement, the government officially runs the economy through direct partnerships with business leaders, effectively replacing market competition with political favoritism.