Corporations become weapons in the global economy

There was a time when Westerners worried, sometimes justifiably, about the influence of large corporations on politics. A company might, for example, seek a large order abroad and send a minister or prime minister to shake hands.

The Trump administration's trade policy is rapidly reversing this. Political influence, particularly in the United States, on the decisions of large corporations is becoming increasingly pronounced. Consider the enormous tech companies, which were initially thought to gain influence in Washington with the arrival of the Trump administration, but the opposite appears to be the case.

And it's contagious. This is evident in the latest trade pact the US signed with Japan. Part of this pact is a Japanese commitment to invest $550 billion in the United States, with the decision-making power over where that money goes largely resting with the White House.

South Korea is also working on such a deal. Just like Japan, in exchange for a reduction in the sky-high import tariffs the US is targeting this year, investments will be made in the US or goods will be purchased. In this case, the deal involves €350 billion, though the agreement hasn't yet been signed. Europe has already committed to buying more American energy. But from whom? Companies will have to do that.

Now, under Trump, trade pacts are fluid. Commitments from America's partners are soft and perhaps even difficult to verify. On the other hand, the experience of recent months shows that the US, in turn, views the agreements as impermanent—more of a framework agreement than a treaty. They can be amended at any time, and that threat keeps the pressure on abroad.

Companies are caught in the middle. Meanwhile, the US is using the Chinese social media company TikTok as a pawn in trade negotiations with China, while Beijing retaliates with an antitrust investigation into Google, only to withdraw it as easily as the trade negotiations demand. Chips from the American company NVIDIA, crucial to the AI ​​industry, are allowed/not allowed/allowed to be sold in China, and China wants/doesn't want them. Or they are allowed, but then the US government gets a cut of the profits.

There are dozens of examples like this. And none of them adhere to the principle of the free market under which the global economy flourished for decades: that capital and business are free to develop where the conditions are best.

Politics has always played a role in this. But the current backward shift is alarming. Not only because this is costing prosperity, but even more so because of the role the US government plays in orchestrating corporate decisions – and exporting it to its economic rivals through trade agreements and pressure.

Thus, the economy and business are increasingly being "weaponized" (to use an American term) in the new geo-economy. The US is essentially leaning towards the Chinese model: a free market under the control of an all-powerful government. This is the main import from China, which is not subject to tariffs in Washington.