Jack Mintz: This year saw the rise of state capitalism in North America. It won’t work

A sign is placed in front of the American whiskey section at a B.C. liquor store after top selling American made products have been removed from shelves in Vancouver. Photo by Ethan Cairns/The Canadian Press files

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A key development in 2025 was the sharp rise of state capitalism in both Canada and the United States. Increased state involvement in the economy is a departure from both nations’ traditional approaches.

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In Canada, Mark Carney’s “nation-building” gives the government a key role in trying to influence economic outcomes. In the United States, the Trump White House’s detailed participation in corporate governance marks a transition toward state-directed economic policy. The governments of both countries are conferring advantages on selected companies, frequently benefiting their owners through direct state intervention in corporate decision-making.

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State capitalism represents a distinct framework, separate from both Marxism and pure capitalism. It involves neither the complete government takeover of the means of production, nor full market autonomy. Instead, it attempts a partnership between the government and private-sector entities in managing economic affairs.

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There are various forms of state capitalism but all share the core feature of governments leveraging economic influence to try to direct corporate behaviour, whether by acquiring equity positions or “golden shares” in companies, granting tariff relief in exchange for compliance with governmental directives, or making other interventions. In many cases, the interests of policy-makers and corporate owners are served, potentially at the expense of consumers, workers, and taxpayers.

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Historically, the U.S. approach to economic matters has prioritized competition, deregulation and neutral tax policies rather than state intervention. It has served the U.S. well, making it the largest economy in the world and helping it outperform Europe over the past century.

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When American governments have acquired firms, the takeovers have typically been temporary, occurring only during wartime or economic emergencies, such as financial crises. But in 2025 Donald Trump’s “Make America Great Again” (MAGA) policies have placed state capitalism at the centre of economic strategy. In June, Japan’s Nippon Steel was allowed to acquire U.S. Steel only on condition that the U.S. government received a board seat and a golden share granting it a veto over major decisions. In August, Washington acquired a 10 per cent stake in semiconductor manufacturer Intel to help secure a domestic supply of chips in furtherance of national security purposes. This followed extensive public investment, including $8.5 billion in grants and $11 billion in loans. At the same time, an agreement brokered with Nvidia permitted the sale of advanced chips to China, contingent on the U.S. government receiving a growing share of related revenues and Nvidia investing US$5 billion in Intel.

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In exchange for tariff relief, drug company Pfizer agreed to reduce selected prices for U.S. consumers and invest in domestic manufacturing. Leveraging its relationship with the administration, Pfizer subsequently acquired Metsera, a company previously targeted by Denmark’s Novo Nordisk.