President Trump's “Gunboat Capitalism” Turns Markets into Hostages

 

When presidents strong-arm companies, growth shrivels, corruption blooms, and rivals retaliate—Trump’s gunboat capitalism trades prosperity for control and security for spectacle.

I picture the scene like a bad crime movie. Smoke in the room. CEOs shifting in leather chairs at Davos, pretending they’re calm while the floor tilts beneath them. Outside, snow falls clean and white. Inside, power plays get dirty. This is where the old marriage between state and corporation is being renewed, and it’s not a love story. It’s a shakedown.

We’ve been here before. Empires once ran on company ledgers and cannon fire. Britain and the Netherlands rode their East India companies like warhorses, trading spices for blood and balance sheets for colonies. Germany’s Krupp forged steel for the state, and the state returned the favor with markets and mines. Japan’s Mitsubishi grew fat alongside imperial ambition. America did its own version, too, backing oil giants as flags followed rigs into foreign sand. The lesson from history is blunt and ugly: when governments and corporations fuse, ordinary people pay the bill.

For a while, the world tried something different. From the 1980s on, borders thinned. Multinationals spread. Capital chased efficiency instead of uniforms. Prices fell. Profits rose. Consumers benefited. It wasn’t perfect, but it worked well enough to lift hundreds of millions out of poverty. That era is now fading fast, and in its place comes something older and meaner. Gunboat capitalism is back, and this time it’s wearing a red tie and a grin.

President Donald Trump doesn’t hide his view. To him, companies aren’t independent engines of growth. They’re tools. Levers. Weapons. Oil bosses are told to go back into Caracas or else. Defense firms are scolded for buying back shares instead of marching in step. Tech companies selling advanced chips to China are told to hand over a cut, as if innovation were a toll road guarded by the state. I hear the subtext clearly: nice business you’ve got there, shame if something happened to it.

This is not subtle policy. It’s coercion with a spreadsheet. And it’s already reshaping the global economy in ways that should scare anyone who still believes prosperity comes from productivity rather than pressure. Western multinationals pull in about $23 trillion a year in sales, over $2 trillion in profit, and employ millions worldwide. When a president binds that kind of muscle directly to state power, the shockwaves don’t stop at the border. They ripple everywhere.

Capital is already retreating. American multinationals once spent less than half their investment at home. Now it’s close to 70 percent. Foreign sales are shrinking in real terms. Strategic industries like software, pharmaceuticals, and carmaking are pulling back the fastest. This isn’t patriotism. It’s fear. When policy zigzags and threats replace rules, companies stop planning long-term and start digging bunkers.

I have seen this movie before in other countries, and it never ends well. In Venezuela, oil became a political weapon. Production collapsed. Poverty exploded. President Trump helped topple Nicolás Maduro chasing commercial riches dressed up as liberation. The result wasn’t stability. It was chaos layered on collapse. The idea that forcing firms to serve the flag automatically produces security is a fantasy sold by men who never wait in bread lines.

The defenders of gunboat capitalism argue the pain is worth it. They say authoritarian rivals are rising. They say democracy must defend itself. I don’t dismiss the threat. China is assertive. Russia wages war in Europe. Supply chains can become choke chains overnight. But here’s the catch: power today doesn’t come from grabbing the most oil fields or bullying the most CEOs. It comes from ideas, from innovation, from the quiet strength of science, talent, and trust.

On that front, the strategy collapses under its own weight. While squeezing companies, the administration wages war on immigration and science, the very engines that drive modern innovation. You can’t strangle the goose and still expect golden eggs. America’s edge has always been intangible capital, the kind you can’t seize with a gunboat or regulate into obedience.

Uncertainty makes it worse. Semiconductor policy swings depending on who whispers last in the Oval Office. One day it’s embargo, the next it’s exemption. Businesses don’t know whether to build, sell, or flee. That uncertainty isn’t an accident. It creates leverage. It invites lobbying. It opens the door to favoritism and graft. When every deal depends on presidential mood, markets stop being markets and start acting like court politics.

The costs are already measurable. In industry after industry, global firms now earn less on their invested capital than domestic-only rivals. The gap has widened since the trade wars of the late 2010s. Less efficiency means less growth. Less growth means fewer jobs and higher prices. When governments create rents, markets warp. When markets warp, societies stagnate. A hand that squeezes too hard drops what it tries to hold.

Supporters insist this pain buys safety. They point to chips and missiles, to embargoes and deterrence. Sometimes, targeted intervention can make sense. But what we’re seeing isn’t careful surgery. It’s blunt force. It invites retaliation. As America champions its own firms and punishes others, other countries respond in kind. Subsidies multiply. Barriers rise. The world fractures into armed camps of corporate nationalism. That doesn’t make us safer. It makes miscalculation more likely.

History is merciless on this point. Economic nationalism in the interwar years deepened the Great Depression and fueled the tensions that led to World War II. State-directed capitalism in the Soviet bloc produced military might but chronic scarcity and eventual collapse. Even modern examples show the trade-off clearly. China’s heavy hand built giants fast, but it also produced massive inefficiencies, debt bubbles, and a tech sector now throttled by its own government’s fear.

I write this with no illusions. The age of freewheeling globalization is over. Governments will intervene more. But how they intervene matters. President Trump’s brand of gunboat capitalism mistakes intimidation for strength and control for competence. It binds business to the state so tightly that when one stumbles, both fall.

At Davos, the talk will be polished and polite. Backroom conversations will be tense. Executives will smile and calculate how much freedom they’ve lost. Outside, the world keeps spinning, poorer and more brittle by the day. The promise of gunboat capitalism is safety with profit. The reality is insecurity with a higher price tag. When power wears a suit and carries a gun, someone always ends up robbed.