There was a time when, sometimes rightly, the Western citizen was right about the influence of large companies on politics. For example, a company was looking for a large order abroad, and had a minister or prime minister to shake the necessary hands there.
The trading policy of the US government Trump is rapidly working to turn that around. Political control, in particular in the United States, of decisions of large companies is taking on increasing forms. See the huge tech companies, which initially thought they were gaining influence on Washington, but the opposite seems to be the case.
And it’s contagious. This can be seen in the youngest trading pact that the US closed with Japan. Part of it is a Japanese commitment to invest $ 550 billion in the United States, with the decision -making where that money goes to the White House.
South Korea is also working on such a deal. As with Japan, in exchange for a reduction of towering input duties on which the US is deploying this year, invested in the US or things are purchased. In this case it concerns 350 billion, whereby the signature has not yet been set. Europe has already promised to buy more American energy. But by whom? They are companies that have to do that.
Now trading spacts under Trump are liquid. Commitments from America’s partners are soft and perhaps difficult to test. On the other hand: the practice of the past months shows that the US in turn shows the agreements as not definitive – rather framework agreement than treaty. They can be changed again, and that threat keeps the pressure abroad.
Companies are in between. In the meantime, the US is using the Chinese social media company Tiktok as a pawn for trade negotiations with China, Beijing refers to Google with an antitrust study, and is as easily recovered as the trade reviews require that. The chips of the American Nvidia, important for the AI industry, may/may not be sold in China, and China wants them to have/does not have them. Or they are allowed, but then the US government gets part of the win.
There are dozens of examples. And none of all adhere to the principle of the free market under which the world economy flourished for decades: that capital and activity have the freedom to develop where the conditions are best.
Now politics has always played a role in this. But the reverse gear in which the process is now is worrying. Not only because this costs prosperity, but all the more because of the role of director of company decisions that the US government takes on – and exports through trade agreements and pressure to its economic opponents.
For example, economics and business are increasingly being ‘weaponized’ (to use an American term) in the new geo-economy. The US is essentially tending to the Chinese model: a free market under the direction of an almighty government. That is the most important import from China, which there is no levy in Washington.