Is Donald Trump a staunch capitalist, a secret socialist, a blend of the two, or none of the above? Depending on the day, it’s hard to tell.
Some of his initiatives are pure Ronald Reagan, such as his corporate-income tax cuts and deregulation efforts targeted at oil and gas. Some of his interventions would impress a Democratic Socialists of America chapter, such as demanding a public stake in Intel, requesting 15 percent of revenues from Nvidia’s chip sales to China, and securing a “golden share” of U.S. Steel to retain veto power over its decision making. As for the rest of Trump’s economic policy, it is a hodgepodge of 19th-century mercantilism, developing-world authoritarianism, and extremely online weirdness. The U.S. tariff rate stands near a 100-year high. When Trump isn’t firing the statisticians who calculate unemployment, he’s waging war against the independent central bank or posting about the fierce urgency of corporate-logo design.
To put it simply, or at least as simply as one can: Trump’s economic agenda is deeply Reaganite and deeply anti-conservative; somewhat capitalist and frequently socialist; declaratively obsessed with “American greatness” yet constantly sidetracked by online outrages that do nothing for the country.
So, what is Trumponomics?
The most interesting answer I’ve heard is “state capitalism with American characteristics,” which The Wall Street Journal’s Greg Ip defined as “a hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises.” This diagnosis makes Trump’s economic policy seem more evolutionary than revolutionary. In the past 70 years, the U.S. government has frequently intervened in corporate affairs, especially in response to emergencies such as World War II (the Defense Production Act), the Great Recession (the bank bailouts), and COVID (the Paycheck Protection Program). Under Joe Biden, Democrats waded into industrial policy with subsidies for clean energy and semiconductors. By one interpretation, Trumponomics doesn’t stand out in history; it’s just the latest example of the federal government taking a more activist role in directing the economy, especially as we try to compete with the juggernaut of authoritarian China, whose modern development was known as “socialism with Chinese characteristics.”
But Trumponomics is too erratic to deserve any comparison with state capitalism, especially in relation to China. As the author Dan Wang writes in his new book, Breakneck, China is an “engineering state,” where Beijing’s control over the economy both emerges from long-term planning and radiates outward through millions of local-government representatives. “The core characteristic of China’s state capitalism is discipline,” Wang told Ip. “Trump is the complete opposite of that.”
Consider, for example, two simple questions: What are Trump’s tariffs supposed to accomplish, and what are they actually accomplishing? The White House, including the economic adviser Stephen Miran, has repeatedly stressed that higher import taxes will bring back manufacturing and revitalize exports. Neither is happening. Manufacturing output has declined every month since the tariffs were announced, and many firms have explicitly blamed Trump’s tariffs. Meanwhile, the president recently struck a deal requiring Nvidia and AMD to pay the government 15 percent of revenue on the sale of AI chips to China. The logic is genuinely hard to follow on a week-to-week basis. Promoting exports with global tariffs (which might be illegal) is one thing. Taxing exports (which might also be illegal) is another thing. But taxing imports and exports simultaneously doesn’t really comport with any coherent economic strategy. As the economy lists toward stagflation, the White House is not doing “state capitalism” so much as it’s doing “step-on-a-rake capitalism”—a tragicomic bungling of economic growth that fails to advance the very objectives it claims to prioritize.
The problem with evaluating this administration’s economic agenda is that Trumponomics is about Trump far more than it is about economics. There is no clear theory of growth steering the U.S. economy, just one man’s desire to colonize every square inch of American attention and experience, which happens to include international markets.
Trumponomics, then, is best understood as Trump’s formula for controlling everything around him, rather than an ideology with a telos. That formula has three main components. The first is declaring an emergency to justify intervention. The second is making threats to force private actors to do his bidding. The third is demanding tribute.
All presidents have the power to declare emergencies. None has used this power as frequently as Donald Trump.
Since 1981, the typical president has declared about seven national emergencies in each four-year term. In the first six months of his second term, Trump has already declared nine, plus a “crime emergency” in Washington. He’s invoked the Alien Enemies Act of 1798 to deport foreigners during a war or invasion, Title X to deploy the National Guard in various cities, and other congressional acts to expedite mining on federal lands. “Even when Trump doesn’t declare a legal emergency, he describes crises that justify dramatic action,” The New York Times’ Adam Kushner wrote. At this rate, Trump is on pace to announce 70 emergencies in this administration, which would nearly match the total number of emergencies announced from 1980 to 2025, according to the Brennan Center for Justice.
Emergency declarations have been core to Trump’s economic agenda. Tariffs, the most significant policy initiative of Trump’s current term, kicked off with an emergency declaration. On February 3, the White House announced its first round of tariffs on Canada, Mexico, and China. Although import taxes are typically the domain of the legislature, Trump as president claimed the authority to tax imports under the International Emergency Economic Powers Act, or IEEPA, because of these countries’ alleged failure to stop the flow of migrants and fentanyl.
The IEEPA is a 1977 law that allows the president to impose financial regulations, such as sanctions or export restrictions, during a national emergency. But no president before Trump ever used IEEPA to tax imported goods. In August, a federal court of appeals struck down the tariffs as unconstitutional, pointing out that IEEPA gives the executive branch authority to regulate imports but not to tax them. Now that net immigration has plummeted to historic lows, it doesn’t even make sense to claim the power to tax imports based on an alleged migration emergency that has, by all accounts, ended. But the White House has said it will fight for the right to impose tariffs all the way to the Supreme Court.
I have said before that the No. 1 rule for understanding Trump is that “a lot happens under this administration, but a lot un-happens, too.” This also is a function of Trump’s “everything is an emergency” style of governance—constantly bending the law into unnatural shapes to justify whatever action the president seeks in the moment.
Just as Trump depends on emergency declarations, he also depends on threats. The president creates pain, then demands tribute, at which point he removes the pain.
To punish ABC for its negative coverage, Trump threatened to revoke its broadcast license, accepted a $16 million financial tribute from the Walt Disney Company, and then backed down. To punish law firms for litigation against him or his allies, Trump threatened several firms with limited access to government contracts before accepting hundreds of millions of dollars in promised pro bono services to Trump-approved causes. To punish Columbia University for a litany of perceived sins, including its DEI policies, Trump froze hundreds of millions of dollars in federal research funding before the university agreed to pay a large tribute and change its policies.
Trump applies the same pain-tribute method to direct international trade and private-firm behavior. In the spring, Trump threatened new tariffs on Japanese and European Union exports. (Pain created.) In response, Japan and the EU agreed to invest more than $1 trillion in the U.S., and Trump himself claimed the authority to direct some of the investment to his favored causes. (Tribute offered.) Then Trump cut both tariff rates by about half. (Pain removed.) Last month, Trump called for Lip-Bu Tan to resign as the chief executive of Intel. (Pain created.) Days later, Tan met with Trump at the White House to work out a deal, and when they emerged, the U.S. government owned 10 percent of his company. (Tribute offered.) Tan remains the CEO of Intel. (Pain removed.)
In the aftermath of any one of these events, you might come up with a philosophical justification. You could defend high tariffs because they raise revenue, or you could defend reduced tariffs because they increase the flow of trade among allies. You could defend firing Tan for his alleged Chinese connections and poor performance, or you could defend retaining Tan as long as the U.S. gets a slice of Intel. But you can’t defend all of these opinions at the same time. Each one represents a specific ideological position, and Trumponomics—outside of a basic distrust of trade and fondness for tariffs—is mostly beyond any ideology. The president’s personalist style of politics is optimally designed not to achieve any specific policy outcome but rather to achieve the vanquishing of a counterparty. Tariffs, insults, threats, and Truth Social posts perform a similar function: They create leverage that Trump can use to claim victory, tribute, or both.
Trump’s personalist style of politics thrusts America back to the late 19th century and the Gilded Age, when corruption was so rampant that it was broadly considered the cost of doing business. The intercontinental railroads depended on insider trading and stock manipulation, as the historian Richard White has said. Andrew Carnegie illegally supplied information to politicians in exchange for their protection of his steel monopoly. The big industrialists in rail, oil, and steel would promise congressmen and senators jobs after leaving office if they did the companies’ bidding.
Corruption oozes out of this White House as well. In his first six months in office, Trump accepted a luxury jet as a gift from Qatar and solicited family-business investments from several Arab states; countries around the world are now racing to build Trump golf courses and towers in a rather transparent bid for his approval. When a crypto mogul under fraud investigation bought $75 million in Trump-backed tokens, the SEC paused his civil case, citing the “public’s interest.”
I can imagine a Trump supporter who has somehow made it this far into the essay thinking: You just don’t get it. The Chinese are eating our lunch. They’re not just catching up on AI. They make two-thirds of the world’s electric vehicles, more than three-quarters of its electric batteries, 80 percent of its consumer drones, and 90 percent of its solar panels. They make 13 times more steel than the U.S. and build naval ships several orders of magnitude faster than we do. We need a big, rude state-capitalist authoritarian to stand up to the state-capitalist authoritarian that is China.
My response to this is: Okay, maybe, but show me any evidence that, given the choice between helping the U.S. against China or helping himself, Trump will actually choose the former? In his first term, Trump insisted that Congress force TikTok to sell itself to a non-Chinese company. In fact, I’d agree that the largest news source for Gen Z probably shouldn’t have an intimate legal entanglement with the Chinese Communist Party. Acting under this logic, House Republicans under Biden voted 186–25 to force a TikTok sale. But after meeting with an investor in ByteDance, the parent company of TikTok, Trump reversed course and has used his executive power to delay the very TikTok sale that (a) he called for and that (b) Congress has legally mandated.
There is no secret plan to help America sell more stuff. If anything, it is American policy itself that has been put up for sale.
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