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TRUMP’S STATE CAPITALISM

Gabriela Gavrilov

Emerson College, Boston, Massachusetts (1996)

MA Journalism

Catholic University, Washington, D.C. (1985) +

University of Warsaw, Poland (1983 – 1984)

BA Political Science / Economics

ggavrilov100@yahoo.com

http://orcid.org/0009-0008-9246-9646

Abstract. This article offers a political economy and international law–oriented analysis of the ongoing transformation of U.S. economic governance toward a more explicit model of state capitalism, framed through the concepts of national security and “commercial diplomacy.” It argues that the United States is increasingly evolving into a platform state, in which public authority operates simultaneously as regulator, commercial intermediary, equity holder, and licensing authority, thereby blurring established boundaries between state power and private capital.

Drawing on recent cases of direct state equity participation, monetization of export control regimes, and government-facilitated corporate transactions in strategic sectors, the article demonstrates how public power is mobilized to enhance the global competitiveness of selected multinational firms. This process redistributes economic risk toward the public while concentrating benefits within elite corporate actors, raising concerns regarding democratic accountability, market competition, and the normative foundations of liberal capitalism. Rather than addressing market failures, these policies tend to reinforce structural imbalances associated with corporate consolidation, weakened antitrust enforcement, and declining representative oversight in economic policymaking.

At the international level, the article identifies a regulatory vacuum: existing global governance institutions lack effective mechanisms to monitor or constrain state–corporate alliances that deploy sanctions, licensing regimes, and market access controls as instruments of geoeconomic strategy. The article concludes that the emerging platform state model poses significant challenges to democratic legitimacy, economic fairness, and the future architecture of international economic governance.

Key words. State capitalism; platform state; commercial diplomacy; political economy; international economic law; state–corporate relations; national security policy; geoeconomics; market distortion; democratic accountability.

Fig. 1. Trump in the image of Lenin

Collage: Mark Wilson/Getty Images, Lebrecht Music & Arts/Alamy Stock Photo

Summary

The US government has increasingly become a brokerage platform for elite business capital accumulation goals under the guise of a national security agenda. Trump’s Administration is strengthening the relationship between elite corporations and the government by taking direct ownership stakes in private companies. This growing prominence of state capitalism further exaggerates multinational firms’ already burgeoning (and unchecked) power by leveraging state backing for large-scale global commercial deals. Aggressive state-supported international business deals driven by national agendas raise concerns over increasing geocommercial tensions.

State-owned enterprises receive state support, cheap capital, and greater market access, giving them huge advantages over private firms, distorting local and global economies, breeding monopolies and benefiting insiders to the detriment of innovation, leading to inefficiency, and economic stagnation. This dynamic, while historically associated with non-liberal economies, is increasingly observable in advanced capitalist systems.

This article examines the growing convergence between state power and elite corporate capital in the United States under the rubric of national security and commercial diplomacy.

Through a corporate-government partnership, American multinationals will gain a stronger position to erect barriers against rival firms’ and prevent new competitors by prohibiting their access to the global market, critical resources and financial support under ethical pretexts. Through the government-business partnership, sanctions enacted under the guise of punishing malign foreign activities or degrade a ‘war machine’ and its economic resources could just as easily be used to ruin rival foreign firms for the purpose of fortifying state-firms’ global competitive advantage.

Moreover, there is no international organizational structure to monitor and regulate the unilateral punitive financial actions taken by the U.S. government to ensure that these actions are not secretly designed to provide those elite firms which enjoy a relationship with it an unfair advantage to global resources and markets at the expense of existing or potential competitors (both foreign and domestic).

‘We the Corporations’

State-Corporate Convergence in Contemporary U.S. Governance

The US government has increasingly become a brokerage[1] platform for elite business capital accumulation goals camouflaged under a national security agenda. If anyone’s had the time to read my latest book U.S.- Russian Commercial Relations 1763-1933 (2025, Atlantic), they would be familiar with the U.S. government’s role as facilitator for its grandest firms is nothing new—it was until recently, however, inconspicuous. President Trump is the first U.S. President to brazenly use his executive powers to act as the Dealmaker-in-Chief for the benefit of elite U.S. corporations.[2]

Once a vocal champion of liberal capitalism, and profit-driven, supply and demand mechanisms, the U.S. –under one of the world’s the grandest businessmen—is now following China, Russia and Brazil in a wave of state purchases of key firms.

This wouldn’t be as disturbing if our elite firms were concerned with the American public, our quality of life, the environment or even the health of the US economy (beyond how it affects their profitability), but they are not—and they’re not really supposed to be.

“You can have a great concentration of wealth, or democracy. Not both.”

Corporations do not factor patriotism into their spreadsheets and are no more loyal to their country of origin than to their state of incorporation[3]. The US federal government (like state incorporation laws), to them, is just a bureaucratic structure which they exploit to promote their capital accumulation goals and shareholders’ private financial interests.

In 2024 alone, the U.S. business lobby spent $4.5 billion[4] on making sure U.S. policy and legislation served their agendas. Because our supposedly ‘exceptional American system’ places congresspeople on a constant fundraising treadmill where they need millions ($2-11million[5]) to win and remain in office, it makes them dependent on constant competitive fundraising and inherently reassigns their loyalties from ‘We the People’ to those in our society with the largest coffers—elite corporations and their affluent owners. (This flaw should be addressed through a Constitutional Amendment but corporations will never allow it.)

As corporate wealth and consolidation has increased, the power of corporations to influence our government has expanded exponentially. Far outpacing overall U.S. citizen wealth, corporate wealth has been driven by low tax rates, massive government subsidies, weak antitrust enforcement, massive lay-offs, increased mergers and acquisitions,[6] and widening pay gaps—the same laws and regulations they won through lobbying. Currently, the top 1% of U.S. businesspeople has accumulated between 30-40% of total wealth, leaving the bottom 50% citizens with less than 3%.[7],[8]

As Justice Louis Brandeis is attributed to saying, “You can have a great concentration of wealth or you can have democracy. You can’t have both.’[9] U.S. democracy has been ‘one dollar = one vote’ for a long time.

Trump’s Administration is strengthening the relationship between corporations and government by taking direct ownership stakes in private companies. While historically anathema to U.S. capitalist ideals, the current administration is increasingly embracing a more active role in the private sector. With over $10 billion of taxpayer funds now invested in elite firms, Trump has transferred public money directly into the pockets of some of America’s richest corporations (U.S. and Canadian). This policy puts the American public further at risk for corporate financial activities than ever before.

Feeding the Hand that Bit You[10]

The U.S. government claims that it is planning to lessen dependence on overseas chip manufacturing, secure a domestic supply of critical chips for defense and technology, maintain the lead in cutting-edge areas like Artificial Intelligence (AI), foster collaboration between the government and key U.S. companies by using existing CHIPS Act[11] grants and other federal funds for corporate incentives.[12]

That might sound great if you’re too young to remember that just a few decades ago our corporations fled the U.S. in mass for the cheap labor markets of Asia and elsewhere, abandoning U.S. workers, their towns and cities. The transfer of U.S. manufacturing overseas profoundly impacted many U.S. cities and regions, particularly in the Rust Belt and parts of the Southeast and New England, where mass job losses lead to economic decline. Communities in Baltimore, Buffalo, Chicago, Cincinnati, Cleveland, Detroit, Milwaukee, Philadelphia, Pittsburgh, Rochester, and St. Louis were devastated when U.S. firms vacated these cities, leaving declining tax revenues, deteriorating infrastructure, and abandoned buildings—and they still have not fully recovered.

How did China become the U.S’s greatest competitor?

After President Nixon’s 1972 visit to China, U.S. corporations began transferring factories there to take advantage of the cheap labor market where the average urban Chinese worker’s annual salaries were 576 yuan in 1977, equivalent to just $384 USD.[13] At the same time, the median U.S. household income was between $13,570 and $16,010.[14]

Neutron Jack

Chairman and CEO of General Electric (GE), Jack Welch, is known for the U.S. business philosophy that went viral during the 1980s that prioritizes shareholder value and global competitiveness over corporate loyalty to a specific country or domestic job preservation. His purely profit-driven methodology drove the offshoring of American jobs to maximize profits.[15] “Ideally,” Welch was quoted as saying, “you’d have every plant you own on a barge to move with currencies and changes in the economy.”

During his tenure as CEO of GE from 1981 to 2001, Welch implemented policies that led to massive job cuts and the transfer of U.S. manufacturing to cheap overseas locations. He slashed GE’s U.S. workforce by half (around 160,000 jobs) while nearly doubling the company’s foreign workforce for a fraction (about 2.4%[16]) of U.S. salaries. Welch’s “downsizing” and cost-cutting measures earned him the nickname “Neutron Jack” (after the bomb that kills people but leaves buildings intact).

A proponent of “shareholder capitalism,” Welch held that a corporation’s purpose is to maximize short-term shareholder profits above all other stakeholders (employees, communities, etc.) and he promoted a corporate model that sought the cheapest labor and most favorable economic conditions on the global market, rather than on making sure the country and the people which made GE a global behemoth continued to share in its success.

Former U.S. Secretary of Labor, Robert Reich says this about Welch:[17]

JACK WELSH became the most admired CEO in America — at least in the business press, on Wall Street, and within rarified precincts like Harvard Business School.

His reign epitomized a chain reaction that started in the 1980s, when “corporate raiders” mounted hostile takeovers, financed by risky bonds. The raiders made fortunes, Wall Street became the most powerful force in the economy, and CEOs began to devote themselves entirely and obsessively to maximizing the short-term value of shares of stock — whatever it took.

Before then, it was assumed that large corporations had responsibilities to all their “stakeholders”— not just their shareholders, but also their employees, the communities where their operations were located, their customers, and the public at large.[18]

For decades, the U.S. government has allowed (and is still allowing) the flight of U.S. businesses abroad to the detriment of our cities, communities, national defense and economy without allowing any real public discussion aimed at ameliorating the destruction these corporations cause to the fabric of our society, our domestic economic system, and the economic and social systems of the foreign nations they exploit.

An example of a major U.S. company profiting from turning over its business to China is IBM’s 2005 sale of its personal computer business including the ThinkPad laptop to Chinese computer maker Lenovo for which IBM received $1.25 billion in cash and an 18.9% stake in China’s Lenovo.[19] In 2014, IBM also sold its x86 server business to Lenovo for another $2.1 billion, again involving cash and stock. In 2015, the state of Massachusetts awarded IBM $2.5 million in state investment tax credits to establish its IBM Watson Health headquarters in Cambridge. The tax breaks were part of an economic development package to create 500 new jobs, with an expected private investment of $51 million. By 2022, IBM had sold most of Watson Health’s data assets, which were spun off into a new company called Merative.[20] Merative’s headquarters are in Ann Arbor, Michigan. They used to have a presence in Cambridge, MA at 179 Sidney St, but that location is listed as permanently closed.[21]

That’s how incentives work.

Trump Administration’s Growing Portfolio

The U.S. government’s recent acquisitions include a 10% stake in semiconductor giant Intel Corp., a 15% stake in rare earth producer MP Materials, a 10% stake in Lithium Americas Corp., a 10% stake in Trilogy Metals Inc., and a “golden share” in US Steel Corporation.[22]

The Department of Defense (DoD) acquired a stake representing about 15% of all shares in MP Materials, making it potentially the company’s largest shareholder, supposedly to counter China’s dominance in the global rare earth market. MP Materials operates the only fully integrated rare earth mining and processing facility in the U.S.

The U.S. Department of Energy (DoE), now holds a 5% equity stake in Canadian Lithium Americas (LAC) and a parallel 5% economic interest in the Thacker Pass mine’s joint venture with General Motors (GM), acquired as part of a restructured 24-year $2.26 billion federal loan won in 2024.[23],[24]

According to Bloomberg, “The US government plans to take more equity stakes in critical minerals companies, a White House official said [on December 6], stating the new policy [is] necessary to counter China’s dominance in the raw materials used in everything from semiconductors to MRI machines.”[25]

Among other deals are a $670 million stake in magnet producer Vulcan Elements Inc. and $35.6 million stake 10% in Canadian minerals explorer Trilogy Metals Inc.

The strategy of investing taxpayer dollars in companies deemed essential to national security comes as US reliance on China for the crucial materials has become a flash point in the trade war.[26]

Trump’s deals, however, ignore that one of the major sources of China’s modern economic growth has been western companies’ massive foreign investment there to exploit low-cost labor of scale and slack industrial and environmental policies.

How China became the “World’s Factory”

After Nixon’s 1972 visit, China transformed itself from a radical opponent of capitalist ideology, to one of history’s greatest platforms for generating profits for western firms. US companies alone have invested hundreds of billions of dollars in China since its opening in the late 1970s, with the stock of U.S. direct investment reaching $126.9 billion in 2023 (a 3.8% increase from 2022), concentrated in manufacturing, trade, finance, and insurance.[27]

Offering monetary incentives and additional tax breaks to the firms who abandoned the U.S. for China’s low-cost labor and slack industrial and environmental policies will only provide these firms broader power over the U.S. economy. Every ‘key’ firm can now claim to want to leave the U.S. for cheaper labor markets or less regulatory control unless they’re provided monetary incentives—not unlike the federal system where states have had to compete for corporate income by offering tax breaks, incentives, and favorable tax structures (like no corporate tax or worldwide combined reporting) to attract businesses, leading to a ‘race to the bottom’ in state corporate tax rates. This competition has driven states to lower corporate income tax (CIT) rates and change local laws to favor large corporations, negatively impacting state budgets and fairness for local businesses and employees. Moreover, once established the incentives will only grow and each year we will be held captive to firms’ increasing demands, especially those that are ‘too big to fail’.

Nvidia’s Sale of Strategic H200 Taiwan-made Chips to China

On December 8, The Wall Street Journal announced that President Trump would approve Nvidia’s sale of its H200 chips to China for an undisclosed amount.[28] The deal also provides for a 25% cut for the U.S. government in an unusual agreement with a private company.[29] The move followed a series of meetings between President Trump and Nvidia Chief Executive Jensen Huang.

Despite the fact that this critical AI technology has the potential to help China militarily and economically, the Trump Administration granted the world’s #1 most valuable company, Nvidia, permission to sell its second-most-powerful chip to China. The approval is an abrupt about-face from previous policy which placed restrictions on Chinese companies’ access to US technology.

In August, Nvidia Chief Financial Officer Colette Kress said that the company could ship between $2 billion and $5 billion-worth of chips to China per quarter, which could increase. This means Nvidia’s Taiwanese-made chip sales to China alone would be between $8 billion and $20 billion a year—to start. How this could help US employment or domestic manufacturing remains unexplained. Also left unexplained was what the 25% cut for the US government, which would translate to between $2 billion and $5 billion per annum, would be used for.

Trump said the government would allow similar exports from Advanced Micro Devices as well as Intel.[30]

US Government Ownership Stake in Intel

On August 22, 2025, the U.S. government purchased a 10% stake in Intel, the computer chip designer and fabricator. The move has its roots in the Biden administration’s 2022 CHIPS and Science Act, which among other things, encouraged companies to make chips in the U.S. by setting aside $53 billion in incentives for manufacturing, research and development. Of that, $39 billion would be allocated as subsidies for building new facilities—Effectively using U.S. tax funds to bribe U.S. firms to maintain or return their manufacturing facilities on U.S. soil. Whether it is a one-time bribe or will expand into yearly or quarterly ‘incentives’ has not been publicly discussed.

During the pandemic, the U.S. government claimed it would lure U.S. manufacturing companies of those parts out of cheap labor-Asian nations and back to the U.S. with taxpayer money. Yet there is no mention of Nvidia relocating its manufacture of the H200 chip from Taiwan to the US.

While the rationalization for the investment is the increasingly critical nature of Intel’s products to national security, for their use in aerospace and weaponry, telecommunications, automotives and medicine, Trump’s approval of the sale of Nvidia’s strategic chips to China negates that defense.

Foreign Policy is now ‘Commercial Diplomacy’

Foreign policy under the Trump administration has also undergone a radical public shift. “The United States will prioritize commercial diplomacy, to strengthen our own economy and industries…” says the National Security Strategy released from the White House last November. Instead of being a hidden agenda behind traditional diplomacy, the Trump White House has acknowledged that the U.S. will now openly pursue ‘commercial diplomacy’.

The official public version of ‘commercial diplomacy’ is to advance national interests, essentially making economic strength a key part of soft power and global influence, moving beyond traditional military or political approaches. The administration’s focus on corporate demands, however, ignores the U.S. public and it’s needs for healthcare reform, affordable education, the social security funding crisis and numerous other issues.

Representation Without Taxation

“No taxation without representation” was a rallying cry from the American Revolution, protesting England’s taxation of the American colonies without allowing meaningful representation of their interests or consent to the laws. Today it describes the circumstances where corporations pay much less tax than the US population but enjoy greater government representation for their capital accumulation goals and enacting laws in their favor.

In the U.S., individual income tax is the largest federal revenue source, around 10-10.5% of GDP (2022), while corporate income tax currently between 1.6 – 1.7% (2021-2023). Total federal revenue hovers around 17-19% of GDP, with payroll taxes also a major component, making individual income tax the primary contributor among income taxes. In 2024, individual income tax revenue was approximately 8.4% of GDP, while corporate income tax revenue was an estimated 1.8% of GDP. For 2025, individual income tax revenue is projected to be around 8.8% of GDP, and corporate income tax revenue is forecasted to slightly decline to approximately 1.6% of GDP.[31] It’s no wonder the wealth gap is widening.

During Fiscal Year 2024, the U.S. federal government collected approximately $2.4 Trillion in individual income taxes. Meanwhile, approximately $530 Billion in federal corporate income taxes was collected for the same year.[32]

Declared FY 2024 Corporate Profits After Tax (CP) was around $3.7 trillion for Q4 (4th quarter), $3.4 trillion for Q3; $3.5 trillion for Q2 and $3.26 trillion for Q1 adding up to $13.86 trillion corporate profits after tax.

Embassy Deal Teams

Formally launched in February 2020, the US State Department’s “Embassy Deal Teams … bring together the collective programs, resources, and expertise of the U.S. government to support U.S. companies. This multi-agency collaboration promotes … deals which have delivered billions of dollars for U.S. companies.”[33]

The U.S. government’s role in assisting U.S. firms’ business objectives now includes the following tasks paid for by U.S. taxpayers—instead of the businesses who benefit from it:

  • Information Gathering and Dissemination (Intelligence): Commercial diplomats collect and share critical market intelligence with businesses in their home country providing information on the foreign country’s rules, regulations, cultural nuances, and market opportunities.
  • Establishing networks with local business people, government officials, potential partners, distributors, and investors, facilitating buyer-seller meetings.
  • U.S. Commercial diplomats provide active advocacy on behalf of U.S. businesses and industries to ensure “fair” treatment and a “level playing field” in foreign markets, reducing or eliminating trade barriers, such as non-tariff barriers or “burdensome” regulations.
  • They engaging in direct advocacy and lobbying of the host government to change domestic economic policies that impact international commerce.
  • Promotion and Marketing Campaigns.
  • Engaging in image building campaigns to attract foreign direct investment (FDI).
  • Legal Problem Solving and Dispute Resolution of conflicts that arise during international transactions.
  • Providing legal support such as Mediation/Arbitration in cases of contract disputes, intellectual property violations, or other business conflicts.

The State Department’s Diplomatic Programs including commercial/economic work received about $10.4 billion for Fiscal Year 2024, as part of the larger International Affairs Budget which is about $78 billion.[34]

The Emerging ‘Platform State’

The US is leading the world into an era of ‘commercial diplomacy’, and it is directly challenging institutions and policies built in the post-World War II era designed to maintain peace and economic stability such as global trade policies and the United Nations, which could also serve as monitoring platforms for unilateral U.S. commercial policy and its motivations. In their place, tariffs, companies and trade deals are being used for international tradecraft.[35]

British Investment firm BaillieGifford explains:

The US as an emerging ‘platform state’.

One of Baillie Gifford’s private company holdings, autonomous drone company Zipline, is the clearest and most recent example. Under its new State Department agreement, the Trump administration is funding $150m of Zipline equipment and infrastructure in Rwanda, Ghana, Nigeria, Kenya and Côte d’Ivoire, after having closed the US Agency for International Development (USAID).

The State Department releases funds only when specific delivery targets are met. After that, African governments pay Zipline for each delivery they receive in a pay-for-performance model that could unlock $400m if successful.

A similar model is emerging in the technology sector. Nvidia and Advanced Micro Devices (AMD) have agreed to pay 15 percent of their China AI-chip revenue to the US government, via the Commerce Department, in exchange for the export licenses required to sell restricted products abroad.

This arrangement is a commercial permission with a fee, distinct from bans or subsidies. Tariffs sit alongside these licensing rules, the idea being to steer supply chains by raising costs for strategic rivals and giving preferential access to selected partners.

Under the current administration, the US appears to be evolving from a donor state to what you could call a platform state – a government that procures services from private operators rather than running programs directly and uses tariffs and export rules to influence where those operators invest.

Instead of wiring grants to the United Nations or USAID, it buys capacity from logistics and technology firms. Instead of prohibiting AI chip sales to China outright, it monetizes the scarcity created by export controls. Tariffs and revenue-sharing frameworks push and pull factories, supply chains and capital toward preferred jurisdictions.

In practice, this is commercial diplomacy: foreign policy carried out through corporate capability.[36]

Continued Subsidies

While Musk’s Department of Government Efficiency (DOGE) decried excessive government spending and vowed to cut waste, direct federal spending on corporate welfare (subsidies) continue at around $181 billion annually, with an additional $154-188 billion in corporate tax savings through loopholes and tax breaks in 2024 alone. Recent legislation in 2025 included nearly $1 trillion in new corporate tax breaks for the following decade.[37],[38]

The U.S. government provides the fossil fuel industry alone with an estimated $34.8 billion annually in subsidies and tax breaks. It also ‘gifts’ our natural resources on public lands to corporations at below-market rates for drilling, logging, and mining. In September 2025, reports tallied that recent legislation added nearly an additional $40 billion in federal subsidies for oil, gas, and coal over the next decade. These figures don’t even account for costs incurred by environmental damage and climate change (which Trump calls a “hoax”). Tallying these unaccounted costs for the fossil fuel industry alone drives the cost to taxpayers into the hundreds of billions annually, with one 2022 estimate at $760 billion when including societal costs.[39],[40]

It’s one thing for a nation to manipulate its own domestic system, but quite another to allow a financially and militarily powerful nation to distort the global market through government sponsored, corporate directed, unfair practices.

No International Organizational Structure to Monitor and Regulate

Without any international organizational structure to monitor and regulate the activities of a financially and militarily powerful nation determined to fortify the global market position of those firms it has a relationship with, the U.S. is challenging its own founding principles of democracy and ‘checks and balances’[41]. This ‘my way or the highway’ attitude of the U.S. administration to the rest of the world is sorely out of the American national character cultivated by decades of propaganda.

While the extraterritorial activities of multinational corporations are (still) not monitored for their economic and social impacts when they operate in foreign countries, a proposed UN Treaty aims for direct corporate responsibility for human rights.

A UN Treaty (proposed by Ecuador with support from other small countries) aims to establish direct, legally binding human rights obligations for transnational corporations. Adopted by the UN Human Rights Council on June 26, 2014, Resolution 26/9, known as the Business and Human Rights (BHR) Treaty, has suffered significant opposition from developed countries where those MNC’s to be monitored exercise significant influence. For the past 10 years, the UN’s BHR Treaty has sought to address the challenge of regulating powerful multinational corporations operating internationally, to develop a legally binding instrument on business and human rights with little success.

One of the reasons for that failure is the fact that powerful business voices have been allowed to participate in the negotiation process.

An April 2025 report from the Centre for Human Rights Erlangen-Nürnberg (CHREN) states the following:

[The CHREN report] looks at the role of corporations in the negotiations of the BHR Treaty but it is nevertheless important to acknowledge that corporations are not the main negotiators of the Treaty. Formally, they do not have the power to enter into international treaties and bear obligations under international law. States are the primary subjects of international law, which means that they are the ones with rights and obligations, and the corresponding ability to enter international treaties. Corporations, on the other hand, lack independent legal personality and cannot formally be held accountable under international law.[42]

Despite this, corporations play a significant economic and political role in international relations today. They shape globalisation, trade, supply chains, and have important environmental and human rights impacts. This raises concerns about the limits of a state-centred international legal system. Corporations already influence international law, particularly in economic and trade matters. However, they have also been associated with major human rights violations. This has reinforced calls to hold them accountable, including under rules of international law. While corporations currently do not bear direct international human rights obligations, their growing influence has sparked debate over whether they should. Supporters of corporate accountability argue that subjecting corporations to international law would help close regulatory gaps, prevent human rights violations and create legal consistency. Relying solely on state-based mechanisms is seen as insufficient, as some governments fail to protect human rights due to their economic dependence on corporate investments. Legal reforms would be needed to impose binding obligations on corporations, ensuring compliance with human rights and environmental standards regardless of national legislation.[43]

While CHREN erroneously states that, “Corporations … lack independent legal personality and cannot formally be held accountable under international law,”[44] it has allowed them, through powerful global business networks which advocate corporate interests, to participate in the treaty negotiation process. Those ‘main business networks’ such as the Geneva-based International Organisation of Employers (IOE), which claims to be the largest global network of the private sector, the United States Council for International Business (USCIB) which represents major global companies whose collective economic assets are in the trillions of dollars, and the International Chamber of Commerce (ICC), whose dispute resolution services have approximately US$354 billion in pending cases annually—when the U.N.’s total annual budget for 2025 was just $3.7 billion. Accordingly, these ‘business networks’ oppose the current BHR Treaty draft due to concerns over feasibility, legal implications, and financial consequences and instead advocate for voluntary approaches.[45]

But there is more than human rights at stake and it is something no one seems to be stating.

Power Plays to Gain Unfair Advantage of Markets and Resources

The dangerous feature of commercial diplomacy, especially one driven by a commercially powerful country, is that there’s never a shortage of political and ideological reasons to penalize a foreign nation and its grandest firms, especially if some of those firms pose a competitive challenge to the elite firms of the enforcing nation. Moreover, there exists no international organizational infrastructure to monitor and regulate the punitive commercial measures enacted by various states against another to ensure that those measures are for the reasons stated and not to disguise a power play to gain an unfair commercial advantage of a market or resource.

There are just too many instances in history where complete information regarding events did not emerged until decades later. There needs to exist an international tribunal dedicated to monitoring economic sanctions—not just the US Treasury—to ensure that true justice is being pursued and not just ‘commercial diplomacy’ aimed at ensuring that “America [remains] First”. The U.S. government’s insistence that it act as ‘global policeman’—while eschewing international organizations already in existence set up for that role—not only deflects attention and resources from domestic issues but embroils us in political and commercial intrigues which will rightly challenge our professed role as champion of ‘free market’ capitalism and unfettered competition.

The expansion of U.S. state capitalism under the banner of national security and commercial diplomacy marks a structural transformation rather than a temporary policy deviation. What is emerging is not a corrective to market failure, but a new governance model in which state power is systematically leveraged to consolidate corporate dominance, distort global competition, and reallocate public risk in favor of private gain.

By assuming ownership stakes, monetizing export controls, and acting as a commercial broker for select firms, the U.S. government is no longer merely regulating markets—it is actively participating in them. This participation, however, is asymmetric: profits are privatized, while risks, liabilities, and long-term social costs are socialized. The result is a system that weakens democratic accountability at home while exacerbating geoeconomic tensions abroad.

The danger of this model does not lie in state involvement per se—states have always played a role in economic development—but in the absence of effective institutional constraints capable of distinguishing legitimate security policy from disguised geocommercial advantage. Without transparent oversight, judicial review, or international monitoring mechanisms, “commercial diplomacy” risks becoming an instrument of exclusion rather than cooperation.

At the international level, this transformation exposes a fundamental vacuum in global economic governance. Existing institutions are ill-equipped to monitor or regulate state–corporate alliances that weaponize sanctions, licensing regimes, and market access to achieve strategic commercial outcomes. The resistance to binding international standards on corporate accountability further entrenches this imbalance, allowing economic power to expand without corresponding legal responsibility.

Ultimately, the platform state model challenges the very foundations of liberal capitalism and democratic legitimacy. When governments function as brokers for elite firms rather than as representatives of the public interest, markets cease to be competitive, democracy becomes procedural, and sovereignty is reduced to a tool of capital management. Whether this trajectory can be reversed depends not on rhetoric, but on the reassertion of institutional checks—domestic and international—capable of restoring the distinction between public power and private profit.

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Electronic resource: https://www.merative.com/contact#:~:text=Address:,Ann%20Arbor%2C%20Michigan%2048108

Electronic resource: https://finance.yahoo.com/news/trump-administration-now-holds-stakes-023008085.html

Electronic resource: https://www.energy.gov/articles/department-energy-restructures-lithium-americas-deal-protect-taxpayers-and-onshore

Electronic resource: https://lithiumamericas.com/news/news-details/2024/Lithium-Americas-Closes-2.26-Billion-U.S.-DOE-ATVM-Loan/default.aspx

Ari Natter (December 4, 2025). “US Plans More Stakes in Minerals Companies, Trump Official Says”, Bloomberg.

Electronic resource: U.S. Embassy report, https://china.usembassy-china.org.cn/u-s-relations-with-china/#:~:text=U.S.%20foreign %20direct %20investment%20(FDI,down%206.2%20percent%20from%202022.

Amrith Ramkumar and Robbie Whelan (December 8, 2025). “Trump Says U.S. Will Allow Nvidia H200 Chip Sales to China, Get 25% Cut, President’s decision to allow exports of powerful chip comes after meeting with company’s chief executive”, The Wall Street Journal.

Electronic resource: Congressional Budget Office, “The Budget and Economic Outlook 2025-2035”. https://www.cbo.gov/publication/61172#:~:text=Revenues%20total%20$5.2%20trillion%2C%20or,reaching%2018.3%20percent%20in%202035.&text=The%20deficit%20for%202025%20is,not%20subject%20to%20the%20shifs

Electronic resource: https://www.state.gov/deal-teams#:~:text=Embassy%20Deal%20Teams%20Coordinate%20Interagency, supported%20millions%20of%20U.S.%20jobs.

Electronic resource: https://www.pgpf.org/article/how-much-does-the-government-spend-on-international-affairs/

Electronic resource: https://www.bailliegifford.com/en/uk/individual-investors/insights/ic-article/2025-q4-us-perspectives-commercial-diplomacy-10059554/

Ben James (December 2025). “Are we in an era of commercial diplomacy?” BaillieGifford.

Electronic resource: https://www.cato.org/policy-analysis/corporate-welfare-federal-budget-0#:~:text=This%20study%20tallies%20 corporate%20welfare,%EF%B9%A2

Electronic resource: https://www.americanprogress.org/article/congress-tax-bill-is-selling-out-americas-public-lands-and-waters/#:~:t ext=Cutting%20special%20deals%20for%20fossil,including%20conservation%20and%20outdoor%20recreation.

Electronic resource: https://www.wired.com/story/us-taxpayers-will-pay-billions-in-new-fossil-fuel-subsidies-thanks-to-the-big-beautiful-bill/#:~:text=A%20new%20report%20finds%20the,existing%20support%20for%20fossil%20fuels.

Electronic resource: https://media.business-humanrights.org/media/documents/Corporations_in_the_UN_BHR_Treaty_Negotiations_ Final_Report_CHREN_April_2025.pdf

Electronic resource: https://media.business-humanrights.org/media/documents/Corporations_in_the_UN_BHR_Treaty_Negotiations_ Final_Report_CHREN_April_2025.pdf

  1. In business, brokerage refers to the service of acting as an intermediary connecting buyers and sellers to facilitate commercial transactions for a fee or commission, with brokerage firms providing platforms, research, and execution for clients. ↑
  2. The characterization of Donald Trump as a “deal maker” stems from his career as a real estate developer and businessman, a persona he actively cultivated, particularly through his 1987 book, Trump: The Art of the Deal. In the book, he famously stated, “Deals are my art form. Other people paint beautifully on canvas or write wonderful poetry. I like making deals, preferably big deals. That’s how I get my kicks”. (Antonia Hitchens, July 21, 2025, “Donald Trump’s Tariff Dealmaker-in-Chief, How Howard Lutnick, the Secretary of Commerce, plans to transform government into a money-making enterprise.” The New Yorker. ↑
  3. The state of incorporation is the U.S. state where a company formally files its legal formation documents (like Articles of Incorporation) to become a recognized corporate entity, establishing which state’s laws (governance, taxes, reporting) will govern it, though this can differ from the state where the business physically operates (its home state or domicile state). Many companies choose states like Delaware for favorable corporate laws, while others incorporate in their primary operating state for simplicity, a choice depending on costs, goals, and legal benefits. ↑
  4. “Federal Lobbying Spending Reached New High in 2024, Bloomberg Government’s 10th Annual Top-Performing Lobbying Firms Report Finds”. (April 15, 2025) Bloomberg. ↑
  5. Amisa Ratliff (July – September 2022). “The Congressional Fundraising Treadmill: Six Numbers to Know from New Campaign Finance Filings”, OneIssue.org. ↑
  6. Electronic resources: https://www.troweprice.com/institutional/nz/en/insights/articles/2025/q4/how-us-firms-became-profit-giants-and-why-it-may-not-last-apac.html#:~:text=To%20summarize:%20The%20digital%20age,the%20present%20(Figure%204). ↑
  7. “Share of Net Worth Held by the Top 1% (99th to 100th Wealth Percentiles) — Series WFRBST01134”. FRED, Federal Reserve Bank of St. Louis (source: Board of Governors, DFA). ↑
  8. “Distributional Financial Accounts — Overview”. Board of Governors of the Federal Reserve System. ↑
  9. Dick Dowell (Dec. 1, 2025). “You can have a great concentration of wealth or you can have democracy. You can’t have both.” How Citizens United v. FEC turned Justice Brandeis’ warning into a structural crisis, Medium. ↑
  10. A twist on the idiom “biting the hand that feeds you,” — “Feeding the hand that bit you” implies rewarding or helping someone who has been cruel or ungrateful to you. ↑
  11. The CHIPS and Science Act of 2022 is a U.S. law meant to boost domestic semiconductor research, development, and manufacturing through $52.7 billion in subsidies and tax credits, aiming to strengthen supply chains, create jobs, and increase U.S. competitiveness against China. It is also directing tax funds to broader science/tech research like AI and quantum computing. Signed in August 2022, it provides incentives for companies like Intel, TSMC, and Samsung to build new fabrication plants in the U.S., alongside investments in workforce training and R&D for future technologies. ↑
  12. Electronic resources: https://www.pbs.org/newshour/politics/what-economic-and-policy-experts-think-about-the-u-s-governments-stake-in-intel#:~:text=The%20Trump%20administration’s%20unusual%20step,nation’s%20economy%20down%20with% 20it. ↑
  13. Geremie Barmé, (19 April 2025). “Renminbi 人民币”. The China Story. ↑
  14. Electronic resource:

    https://www.census.gov/library/publications/1978/demo/p60-117.html#:~:text=The%20median%20money% 20income%20of,change%20from%20the%201976%20median. ↑

  15. Electronic resource: https://robertreich.substack.com/p/jack-welch-and-the-end-of-stakeholder ↑
  16. $384/yr. (Chinese salary) is 2.4% of $16 000/yr. (U.S. salary). ↑
  17. Robert Reich (Sep 01, 2023). “Jack Welch and the End of Stakeholder Capitalism”. Chapter 5 of The Common Good. ↑
  18. Electronic resource: https://robertreich.substack.com/p/jack-welch-and-the-end-of-stakeholder ↑
  19. Electronic resource: https://www.forbes.com/sites/timbajarin/2025/05/06/the-20th-anniversary-of-lenovo-ibm-deal-that-reshaped-the-pc-industry/ ↑
  20. Electronic resource: https://masslib.dspace7.dspace-express.com/server/api/core/bitstreams/dea96588-00f7-45ea-916a-24c41e7844a2/ content ↑
  21. Electronic resource: https://www.merative.com/contact#:~:text=Address:,Ann%20Arbor%2C%20Michigan%2048108 ↑
  22. Electronic resource: https://finance.yahoo.com/news/trump-administration-now-holds-stakes-023008085.html ↑
  23. Electronic resource: https://www.energy.gov/articles/department-energy-restructures-lithium-americas-deal-protect-taxpayers-and-onshore ↑
  24. Electronic resource: https://lithiumamericas.com/news/news-details/2024/Lithium-Americas-Closes-2.26-Billion-U.S.-DOE-ATVM-Loan/default.aspx ↑
  25. Ari Natter (December 4, 2025). “US Plans More Stakes in Minerals Companies, Trump Official Says”, Bloomberg. ↑
  26. Ibid. ↑
  27. Electronic resource: U.S. Embassy report, https://china.usembassy-china.org.cn/u-s-relations-with-china/#:~:text=U.S.%20foreign %20direct %20investment%20(FDI,down%206.2%20percent%20from%202022. ↑
  28. Amrith Ramkumar and Robbie Whelan (December 8, 2025). “Trump Says U.S. Will Allow Nvidia H200 Chip Sales to China, Get 25% Cut, President’s decision to allow exports of powerful chip comes after meeting with company’s chief executive”, The Wall Street Journal. ↑
  29. Amrith Ramkumar and Robbie Whelan (December 8, 2025). “Trump Says U.S. Will Allow Nvidia H200 Chip Sales to China, Get 25% Cut, President’s decision to allow exports of powerful chip comes after meeting with company’s chief executive”, The Wall Street Journal. ↑
  30. Ibid. ↑
  31. Electronic resource: Congressional Budget Office, “The Budget and Economic Outlook 2025-2035”. https://www.cbo.gov/publication/61172#:~:text=Revenues%20total%20$5.2%20trillion%2C%20or,reaching%2018.3%20percent%20in%202035.&text=The%20deficit%20for%202025%20is,not%20subject%20to%20the%20shifts. ↑
  32. According to data from the Bureau of the Fiscal Service, Statista, and USAFacts. ↑
  33. Electronic resource: https://www.state.gov/deal-teams#:~:text=Embassy%20Deal%20Teams%20Coordinate%20Interagency, supported%20millions%20of%20U.S.%20jobs. ↑
  34. Electronic resource: https://www.pgpf.org/article/how-much-does-the-government-spend-on-international-affairs/ ↑
  35. Electronic resource: https://www.bailliegifford.com/en/uk/individual-investors/insights/ic-article/2025-q4-us-perspectives-commercial-diplomacy-10059554/ ↑
  36. Ben James (December 2025). “Are we in an era of commercial diplomacy?” BaillieGifford. ↑
  37. Electronic resource: https://www.cato.org/policy-analysis/corporate-welfare-federal-budget-0#:~:text=This%20study%20tallies%20 corporate%20welfare,%EF%B9%A2 ↑
  38. Electronic resource: https://www.americanprogress.org/article/congress-tax-bill-is-selling-out-americas-public-lands-and-waters/#:~:t ext=Cutting%20special%20deals%20for%20fossil,including%20conservation%20and%20outdoor%20recreation. ↑
  39. Ibid. ↑
  40. Electronic resource: https://www.wired.com/story/us-taxpayers-will-pay-billions-in-new-fossil-fuel-subsidies-thanks-to-the-big-beautiful-bill/#:~:text=A%20new%20report%20finds%20the,existing%20support%20for%20fossil%20fuels. ↑
  41. Checks and balances in government is a system where each of the three branches (legislative, executive, judicial) has powers to limit or oversee the other branches, preventing any single branch from becoming too dominant, ensuring a separation of powers, and protecting against tyranny through shared authority and accountability. ↑
  42. This is an absolutely erroneous statement. ↑
  43. Electronic resource: https://media.business-humanrights.org/media/documents/Corporations_in_the_UN_BHR_Treaty_Negotiations_ Final_Report_CHREN_April_2025.pdf ↑
  44. Corporations do possess an independent legal personality (separate legal entity), a fundamental concept in law that treats them as artificial persons with rights and duties distinct from their owners, allowing them to own property, sue, be sued, and enter contracts. This legal fiction, evolving from Roman law, is crucial for commerce, enabling limited liability and simplifying complex business operations, even though some debate exists, especially regarding constitutional rights. Why CHREN would claim otherwise is troubling. ↑
  45. Electronic resource: https://media.business-humanrights.org/media/documents/Corporations_in_the_UN_BHR_Treaty_Negotiations_ Final_Report_CHREN_April_2025.pdf ↑