Trump, tariffs and the working class

The two articles below address the tariffs recently announced by the US against China, Canada and Mexico.

The first article, written by Friends of Socialist China advisory group member and International Manifesto Group convenor Radhika Desai, republished from CGTN, points to the cynical economic motives for these tariffs: to rob from the poor to pay the rich. Since the cost of tariffs is passed on to consumers, they constitute a stealth tax on ordinary Americans, and will help make up for the loss of revenue resulting from the Trump regime’s tax cuts for the super-rich.

The cost of the tariffs will be paid by ordinary US consumers. And they will pay in order that the richest US taxpayers can enjoy greater tax cuts, which is the key reason why Trump needs the tariff revenues.

Tariffs will also drive up inflation, further impacting living conditions of the working class.

The putative aim of the tariffs is to bolster US manufacturing. However, “for US capital, given its decades-long reluctance to invest productively at home, it’s going to take a lot more than tariffs. US capital needs to be turned away from the unproductive, predatory and speculative financial ventures in which it is engaged and towards serious productive investment.”

The second article, republished from Workers World, details the likely negative impact of the tariffs on the US economy, and denounces the Trump administration’s threats against the BRICS countries.

Attacks against BRICS are detrimental to workers in G7 countries… BRICS countries are displaying self-sufficiency and independence from Western imperialism and settler colonialism. Relations between China and Russia have also strengthened because of BRICS. Many countries in the Global South have less of a need to trade with the U.S. than they did in previous decades, and therefore they have more leverage to maintain sovereignty.

The article concludes:

Trump’s promotion of tariffs is harmful to workers all over the globe. Imperialist protectionism and isolationism are an obstacle to working-class unity, and they should be opposed. International solidarity is necessary in resisting anti-worker tariffs and defeating the racist, xenophobic “America First” agenda. Workers and oppressed peoples of the world, unite!

Trump’s empty tariff brinkmanship

After days of keeping the world guessing whether he would commit to such a disastrous course, U.S. President Donald Trump has started his trade wars against his country’s three most important trade partners, Canada, Mexico and China.

In announcing the tariffs on exports from these countries, Trump was self-contradictory, claiming they were a negotiating tool designed to deal with U.S. trade deficits, and then that they were not. Their true extent remains unclear: From the apparently blanket tariffs of 25 percent on Canada and Mexico and 10 percent on China, he has already reduced tariffs on oil, natural gas and electricity from Canada to 10 percent, and uncertainty prevails over exactly which goods they will hit, how, and by how much.

The Financial Times called it “a trade war on steroids” while the Washington Post declared it “the dumbest trade war in history.” Many others said these sky-high tariffs could not be expected to last forever.

So, as the world tightens its seatbelt for a bumpy ride through the Trump quadrennial, let’s parse the real wheat from the rhetorical chaff so we can better anticipate the course of the trade wars Trump has started. The key is that Trump’s tariffs are incoherent in conception and applied for the wrong reasons.

Trump is certainly using them as negotiating tools. He claims they are superior to sanctions, which scare other countries from the dollar system he wishes to save. Exactly how adding the weaponization of trade to the weaponization of the dollar is going to help the U.S. is anyone’s guess.

It can only redouble the world’s resolve to stand up to Trump’s bullying. We can already see this happening as Mexico and Canada have both imposed countermeasures, and China is planning to do the same. No one is paying the least attention to Trump’s further threat that retaliation will lead to higher tariffs.

Trump claims the tariffs will raise revenue from non-U.S. individuals and entities. Nothing could be further from the truth. Tariffs are paid by importers, not exporters and, though the latter may provide some price concessions, the U.S. is no longer a dominant buyer of the world’s goods and services. It is therefore unlikely to receive significant price concessions for goods it was getting cheaply anyway, and for which there are plenty of other markets.

The cost of the tariffs will be paid by ordinary U.S. consumers. And they will pay in order that the richest U.S. taxpayers can enjoy greater tax cuts, which is the key reason why Trump needs the tariff revenues.

Furthermore, Trump claims the tariffs are going to boost U.S. manufacturing. However, the hostility and uncertainty his policies have already created for supplier firms is hardly an invitation for them to shift their manufacturing to the United States. As for U.S. capital, given its decades-long reluctance to invest productively at home, it’s going to take a lot more than tariffs.

U.S. capital needs to be turned away from the unproductive, predatory and speculative financial ventures in which it is engaged and towards serious productive investment. It needs to accept far lower profits and work harder like the innovators of DeepSeek or Huawei. None of the maverick capitalists flocking to Trump’s Washington today are up to such rigors.

In the words of one major financial house, tariff threats are chiefly “red meat for the president’s base,” a lot of fanfare about creating jobs around the nothing-burger of Trump’s tariffs.   

Moreover, these ill-conceived tariffs will face opposition from the public as soon as they drive up inflation, which they are sure to. Inflation will also critically impair the Federal Reserve’s ability to lower interest rates.

That is precisely what the highly financialized capitalist class, whose wealth is built on leveraged trading in large volumes of borrowed money, hankers for. Tariffs will also face opposition from the same U.S. corporate capitalist class as they would hurt what residual interest in production and sales they still have.   

Although Canada and Mexico will find this harder than most, becoming independent of, certainly no longer vulnerable to, the U.S. is not impossible. Sane voices in both societies have been suggesting a diversification of trading and investment links for decades. And it is not like they have no alternatives: There is the whole world.


Trump, tariffs and the working class

Before returning to the White House for a second term, President Donald Trump warned he planned on imposing tariffs on several different countries. He stated he would enforce an “emergency executive authority” on day one to enforce tariffs of 25% on products from Canada and Mexico and a tariff of 10% on goods from China.

A tariff is a tax on imported goods and products. Historically, tariffs have been a “protectionist” practice used by bourgeois governments to promote domestic manufacturing. On Jan. 26, Trump showed another face of his program regarding tariffs when he used the threat of a 25% tariff to bully Colombia into accepting migrants the U.S. was deporting; this facet will be covered in future articles.

Tariffs were common at a time when there were more industrial jobs in the U.S. and capitalist countries were in competition with one another. In centuries past, tariffs have led to military conflicts between imperialist rivals.

Trump is now trying to reinforce tariffs as part of his second administration’s chauvinist “America First” agenda, and he is spreading misinformation in the process.

One of the most deceptive arguments Trump makes in defending the use of tariffs is that they will “help workers” who reside in the U.S. Throughout history, taxes on imported products have mostly benefited capitalist investors of selected home-based corporations.

Money collected from tariffs does not go towards creating new jobs or job training programs. Additionally, corporate shareholders who do collect remaining profits from tariffs are likely to receive massive tax breaks.

Bosses of several companies have openly admitted that tariffs will likely cause “inflationary” price hikes for consumers. “The vast majority of that tariff will probably be passed on to the consumer as a price increase,” said Best Buy CEO Corie Barry(Fortune, Nov. 27, 2024) Walmart finance chief officer John David Rainey made a similar comment when he told FOX News reporters, “Tariffs are going to be inflationary, there’s no disputing that.” (Fortune, Nov. 27, 2024)

U.S. tariffs on imported parts 

Many workers use imported goods as inputs when building products domestically. For example, research from the Center for Automotive Research shows that roughly “16 percent of all auto parts used by U.S. assembly plants come from Mexico,” and much of the steel used in U.S. production comes from Canada. (americanprogress.org, Dec. 18, 2024)

Those parts will face tariffs, and thus the cost a U.S. car producer pays for them will increase. When the parts are used in production of U.S.-made cars, this will raise the cost of the car. The higher price will increase the sales price and will often decrease sales and corporate profits, causing furloughs and massive layoffs of workers.

Whether they are imposed on consumer imports or on materials used in production, any increased costs resulting from tariffs will place a burden on workers and not the capitalist employers who seek financial gain.

Trump’s attack on BRICS

Trump is also using talk about tariffs as an opportunity to attack countries affiliated with BRICS (Brazil, Russia, India, China and South Africa founded BRICS). BRICS is an intergovernmental organization, now with 10 members and eight other partners, that represents countries mostly from the Global South. BRICS also symbolizes an alternative to NATO and European Union- aligned G7 countries that embody Western imperialism.

While already threatening People’s China with a 10% tariff, Trump affirmed he plans on placing a 100% tariff on “all BRICS countries.” China is a leading member of BRICS. This idea came up when Trump erroneously called Spain a BRICS country — although it is not.

When a journalist asked what would happen to NATO countries, such as Spain, that do not meet the 2% spending target, Trump responded with confusion. He replied: “They’re a BRICS nation, Spain. Do you know what a BRICS nation is? You’ll figure it out,  We are going to put at least a 100% tariff on the business they do with the United States.” (Newsweek, Jan. 21)

Attacks against BRICS are detrimental to workers in G7 countries, particularly in the U.S. As the Center for American Progress highlights: “The BRICS countries supply countless parts, materials and inputs that fuel production of goods in the United States — goods that are both consumed domestically and exported abroad. Taken along with the 25% tariff on imports from Canada and Mexico, the impact on U.S. manufacturers and their workers would be staggering.” (americanprogress.org, Dec. 18, 2024)

While not directly challenging the imperialist and capitalist system of production, the existence of BRICS can aid workers and oppressed peoples around the world. BRICS countries are displaying self-sufficiency and independence from Western imperialism and settler colonialism. Relations between China and Russia have also strengthened because of BRICS. Many countries in the Global South have less of a need to trade with the U.S. than they did in previous decades, and therefore they have more leverage to maintain sovereignty.

Trump’s promotion of tariffs is harmful to workers all over the globe. Imperialist protectionism and isolationism are an obstacle to working-class unity, and they should be opposed. International solidarity is necessary in resisting anti-worker tariffs and defeating the racist, xenophobic “America First” agenda. Workers and oppressed peoples of the world, unite!

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