Trump railed against socialism in his campaign. He's flirting with it as president

President Donald Trump has tried to strong-arm pharmaceutical companies into lowering drug prices by executive order. He has publicly warned Walmart not to raise prices in response to his tariffs, while privately sending automakers the same message. His administration has signaled that farmers could get bailed out from any market damage caused by his push to remake the world’s trade order.

And last week, the president touted what amounts to quasi-nationalization of steel manufacturing. “We have a golden stock, we have a golden share, which I control, or a president controls,” Trump said about the pending sale of U.S. Steel to Japan’s Nippon Steel. “That gives you total control.”

Trump’s “golden share” in U.S. Steel, negotiated as part of a long-delayed sale, extends for perpetuity, according to Commerce Secretary Howard Lutnick. It hands Trump or his designee veto power to ensure steel production reaches a certain level and that jobs aren’t moved outside the U.S., among other matters at U.S. Steel. The company will soon be a Nippon subsidiary. 

During his campaign for president last year, Trump railed against socialism, often criticizing his political opponents as “communists” and “Marxists.” When then-Vice President Kamala Harris campaigned on cracking down on price gouging for groceries, he attacked her as “Comrade Kamala.”

But as president, Trump has been comfortable deploying the power of government to achieve specific economic outcomes, diverging from the GOP's traditional hands-off, free-market approach. He has taken public and sometimes aggressive steps to exercise greater control over the behavior and decisions of publicly-traded companies. Call it Trump-style socialism, with the president casting aside the invisible hand of Adam Smith and putting himself in charge instead.

“Several of Trump’s policies lean toward central control rather than market incentives,” said Erica York, an economist at the right-leaning Tax Foundation. “Whether it’s the deal with U.S. Steel, the country and industry specific tariffs, or the carveouts in the tax code for certain industries and types of work, too many of the administration’s policies lean toward greater degrees of government involvement in economic decision-making.”

"It's just 'L'état, c'est moi,' right? Trump is the state," said Scott Lincicome, the vice president for economics and trade at the libertarian Cato Institute, referring to a declaration attributed to French King Louis XIV. "He's not a die-hard progressive leftist, but there are certain things he likes. There [are] certain things he wants to be in control of."

Broadly defined, socialism entails the redistribution of wealth, policymakers picking economic winners and losers, and government controlling the means of production in lieu of businesses, among other tenets. In the U.S., as in many countries, elements of socialism already intermingle with capitalism, particularly in social insurance for the elderly and the collection of taxes to finance public roads and public schools. 

“Now I don’t think the end goal is socialism,” York said of Trump’s actions, “but the Trump administration is no stranger to using ‘tools’ of government to intervene in the private market.”

Last month, Trump talked about the U.S. economy as if it were a supermarket with him having final say over prices. “We are a department store, and we set the price,” Trump told Time magazine. “I meet with the companies, and then I set a fair price… and they can pay it, or they don’t have to pay it.”

He cast himself as the chief executive directly managing everything for the public. “I am this giant store. It’s a giant, beautiful store, and everybody wants to go shopping there,” he said. “And on behalf of the American people, I own the store, and I set prices, and I'll say, if you want to shop here, this is what you have to pay.”

As Trump has sought to broaden his reach, he hasn’t shied from targeting specific companies. He lambasted Walmart after its CEO Doug McMillon warned that tariffs could drive price increases for its products. Trump posted on social media within days that the company should “‘EAT THE TARIFFS.” Apple CEO Tim Cook also drew the president's ire last month, after Trump threatened 25% tariffs on iPhones not produced in the U.S. 

That kept up a tendency from his first term to rail against multinational companies or prod them to change course if he perceives them to be an obstacle to his goals. The roster of targets back then included Amazon, Boeing, General Motors, and Harley-Davidson. At one point in 2019, then-Treasury Secretary Steven Mnuchin pushed companies to diversify their supply chains beyond China during Trump’s first trade war.

Jeffrey Sonnenfeld, a Yale School of Management professor who regularly communicates with top CEOs, said Trump has employed a “divide and conquer” strategy that's kept firms from adopting stances that might put a Trump-sized target on their backs.

“CEOs are very frustrated because they don't want to speak out individually, or else you get attacked like these law firms or universities who do speak out,” Sonnenfeld said, referring to Trump’s attacks against Harvard University and prominent law firms.

Now Trump is empowering the government to influence an American company's core operations. That doesn't usually happen outside a period of emergency. The U.S. government last took a golden share in the federal rescue of General Motors following the 2008 financial crisis. The managing stake in U.S. Steel would align the U.S. closer to countries such as China and Brazil, which own golden shares in prized strategic industries.

"What they have done is, in a very elaborate way, nationalized U.S. Steel," said Douglas Holtz-Eakin, president of the conservative American Action Forum. "And that's not something a genuine conservative would do. That's a lot like being a Peronista from Argentina."

There is a twist to Trump-style socialism. To the extent it redistributes wealth, it's poised to flow upward. An analysis on the Trump-backed megabill from the nonpartisan Congressional Budget Office projects that the top 10% of U.S. households would gain $12,000. The poorest 10% of families lose out on $1,600. Democrats are lambasting the GOP's megabill as a giveaway to the richest Americans.

“This is caviar over kids," Democratic Sen. Ron Wyden of Oregon said, "and Mar-a-Lago over the middle class."