Trump Heralds Era of Deal-Making Politics Critics Call ‘Shakedown Capitalism’

Updated by Faith Barbara N Ruhinda at 1516 EAT on Tuesday 12 August 2025

President Donald Trump is fundamentally reshaping global trade and American economic policy, ushering in what critics describe as an era of “shakedown capitalism”—a system where pay-to-play politics appears to be the new norm and every deal is an opportunity to extract concessions, often under threat.

In a striking example of this new model, leading U.S. chipmakers Nvidia and AMD have reportedly agreed to pay 15% of their revenues from semiconductor sales to China directly to the U.S. government in exchange for export licenses. The unorthodox—and potentially legally questionable—arrangement comes after the Trump administration imposed sweeping restrictions on chip exports to China, citing national security risks.

The deal allows the companies to resume sales to a market that is crucial to their bottom lines. China accounted for 13% of Nvidia’s revenue in 2024, and the company had forecast billions in lost sales if the ban remained in effect. While Nvidia has proven remarkably resilient—recently becoming the first publicly traded company to surpass a $4 trillion valuation—the sales freeze had introduced significant financial uncertainty.

The agreement, critics say, exemplifies how the Trump administration is using regulatory leverage to extract financial concessions from U.S. businesses, blurring the lines between state power and private enterprise. Some analysts argue that these tactics reflect a broader pattern in Trump’s economic agenda, one that emphasizes transactional politics, personal loyalty, and punitive leverage over traditional free-market principles.

Whether the arrangement withstands legal and ethical scrutiny remains to be seen, but it is already serving as a stark signal to corporate America: under Trump, access to markets—foreign or domestic—may increasingly depend on how much companies are willing to pay to play.

In exchange for renewed access to the Chinese market, chipmakers Nvidia and AMD have reportedly agreed to hand over a share of their revenue—estimated at $5 billion annually—to the U.S. government. The funds are expected to flow directly into federal coffers, giving President Donald Trump significant discretionary spending power, according to estimates by Angelo Zino, an analyst at investment firm CFRA.

While markets reacted cautiously to the news, the deal has triggered a wave of criticism from economists and investors who view it as an unprecedented overreach.

“This federal shakedown of private companies is unconstitutional,” said Peter Schiff, chief economist at Euro Pacific Asset Management, in a post on X.

Mike O’Rourke, chief market strategist at JonesTrading, echoed the concern in a note to clients: “It’s sad that these two companies would acquiesce to such a deal. They’ve now exposed the rest of corporate America to the risk of needing to make deals with the government in order to transact business.”

Critics say the deal reflects a growing pattern of what has been dubbed “shakedown capitalism”—a strategy in which the White House uses the threat of regulatory or trade restrictions to extract financial concessions from private companies. While there is no historical precedent for this specific arrangement, the move is in line with President Trump’s broader playbook: apply economic pressure, escalate uncertainty, and compel companies—or countries—to the negotiating table.

“That’s our money,” one investor remarked on social media, pointing to the growing unease about the precedent being set and the unclear legal framework surrounding such revenue-sharing agreements.

As the administration touts the arrangement as a win for national security and American leverage, opponents warn that it could mark a turning point in the relationship between government and business—one where access to markets is no longer a right, but a privilege to be negotiated, taxed, or denied.

President Donald Trump has turned crisis creation into a deliberate governing tactic—one in which he manufactures economic or geopolitical turmoil, only to later claim credit for resolving it. Critics liken it to “setting the neighborhood on fire, then showing up with a hose—if your neighbors can afford to pay you.”

When touting recent trade agreements that include hundreds of billions in corporate pledges and investment commitments, Trump frames these financial concessions as payments made to avoid harsher penalties—particularly tariffs. As my colleague Phil Mattingly reported last week, Trump views these deals as transactional victories where countries effectively “pay down” the threat of punitive trade measures.

“I got a signing bonus from Japan of $550 billion,” Trump told CNBC. “That’s our money. It’s our money to invest, as we like.”

This rhetoric underscores what critics call “shakedown diplomacy”—a foreign and economic policy that blurs the lines between deal-making and coercion, further entrenching Trump’s unique brand of transactional governance.

President Trump has increasingly wielded tariffs as a political and economic cudgel—using the threat of punitive trade measures to pressure companies into investing in domestic production.

Apple is one of the most high-profile examples. The tech giant recently secured an exemption from upcoming semiconductor tariffs after announcing plans to invest $100 billion in U.S. operations over the next five years. The move, while framed as a patriotic commitment to American manufacturing, also illustrates the administration’s tactic of tying regulatory relief to corporate concessions.

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