Tariffs Archives - Friends of Socialist China

Statement: Say no to Trump’s tariffs and anti-China policy

The following statement has been issued by the Friends of Socialist China US Committee in response to the Trump administration’s announcement of new tariffs on Chinese imports.

The Trump administration’s decision to slap additional tariffs on the People’s Republic of China is something that should be condemned by every person who cares about peace and progress. These moves are making the world a more dangerous place and are part of a larger anti-China policy being pursued by the Trump administration – a policy begun under the Obama administration and deepened during the Biden administration.

These tariffs are in effect a tax on working people here in the United States and will result in rising prices for our necessities and wants. They will have no impact whatsoever on the lifestyles of the billionaires. Indeed, the money raised from increased prices will be used to fund the Trump regime’s tax cuts for the super-rich. Furthermore, these tariffs will harm the U.S. economy more than China’s. People’s China has a more diversified economy, more trading partners, and a greater share of world trade.

To quote Mao Zedong, “Lifting a rock only to drop it on one’s own feet is a Chinese folk saying to describe the behavior of certain fools.” This certainly applies to Trump and his wealthy backers.

The tariffs against China exist in a larger context. The U.S. empire is in a state of stagnation and decline, while People’s China is developing at an incredible speed. Wall Street and the Pentagon are working to “contain” and encircle China. They are increasing the spending for war preparations, attempting to draw countries in the region into hostile alliances aimed at China, and encouraging separatist forces in Taiwan, Tibet and Xinjiang. The tariffs supplement the hundreds of U.S. sanctions against China in textiles, solar energy, computers and more.

For the past decade, U.S. policy makers have talked about “decoupling” the U.S. economy from that of China. Washington DC’s trade war is a part of that process, and it cannot be separated from preparations for other kinds of war in the Pacific, including those fought by military means.

Socialist China has made incredible achievements. China has waged a real war on poverty, while the U.S. government is waging a war on working people. China is by far the world leader in renewable energy production, electric transport, biodiversity protection and afforestation. China takes public health seriously. That’s why its life expectancy consistently goes up. Here in the U.S., we have measles outbreaks, and vaccine “skeptics” running the show. China wants peace. No serious person can say that about the U.S. today.

We demand that the tariffs directed at China be rolled back. We oppose the Trump administration’s anti-China policy, including any and all preparations for war. And we stand in solidarity with socialist China as it heads into a bright future.

Trump’s tariff tantrums

With the Trump administration’s increasingly aggressive tariff measures, economists are warning of the risk of an international trade war, with the US and China as its major antagonists. To provide some much-needed clarity on this issue, we are pleased to republish below two recent articles from British Marxist economist Michael Roberts.

Michael describes the core of Trump’s tariff strategy as aiming to “make America ‘great again’ by raising the cost of importing foreign goods for American companies and households and so reduce demand and the huge trade deficit that the US currently runs with the rest of the world”. According to the US government, this will boost incomes and jobs in the US. Furthermore, the extra tariff revenues will boost Treasury coffers, supporting the administration’s plan to cut income tax and corporation tax.

What will the actual effect of the tariffs be? Michael argues that the tariffs will not reduce the US trade deficit, but will instead raise prices for US consumers and reduce the competitiveness of US companies. Inflation will rise, taxes will be cut, federal spending will be gutted – meaning that the consequences for the US working class will be dire. At a global level, “increased tariffs and other protectionist measures by all sides in retaliation will weaken world trade and economic growth. World trade growth showed some recovery in 2024 after contracting in 2023. Trump’s tariffs will stop that recovery in its tracks.”

Countering those economists who argue that tariffs have always been a valuable tool for nurturing domestic industry, Michael writes: “The US in the 21st century is not an emerging industrial power that needs to protect burgeoning new industries from powerful competitors. Instead, it is a mature economy with a declining industrial sector that will not be restored in any significant way by tariffs on Chinese or European imports.”

Further:

American capital did not invest to sustain its manufacturing superiority because the profitability of that sector had fallen too mcuh. Instead, they switched to investing in financial assets and/or shifting their industrial power abroad. In the last couple of decades they hoped to sustain an advantage in hi-tech and information technology including AI. Now even that is under threat. But this is not the fault of China running an ‘unfair’ industrial trade policy that is based on suppressing the living standards of its people; on the contrary, it is the failure of US capital to sustain its hegemony, just as Britain did in the late 19th century.

The two articles were first published on The Next Recession blog.

Trump’s tariff tantrums

Feb. 4 (The Next Recession) — Over the weekend President Donald Trump announced a batch of tariff increases on US imports of goods from the closest partners of US trade, Canada and Mexico. He proposed a 25% rise in tariffs (with a lower rate for oil imports from Canada). Then he announced a 10% rise in tariffs on all Chinese imports. Thus Trump started his new trade war.

And yet as soon as he started it, he stepped back. Trump announced that he was postponing the tariff increases with Canada and Mexico for a month because their governments had agreed to do something about the smuggling of fenatyl drugs into the US, which he claimed was killing 200,000 Americans every year. This figure is nonsense, of course, because under 100,000 Americans die from drug overdoses from all chemicals each year. As it is, the smuggling of fenatyl over the US-Canadian border is miniscule – certainly compared to the drug cartel operations on the Mexican border. Moreover, as Mexican President Sheinbaum pointed out to Trump, the cartels are able to operate their violent methods because of gun running operated by Americans in the US.

The Canadian and Mexican governments rushed to do a deal with Trump, promising batches of troops on the borders to stop trafficking and more joint anti-drug forces with the US etc. This seems to be enough for Trump to postpone his tariff move, although the tariffs on China will go ahead (no drugs there?). Also small package imports that have been free of import tax up to now will be brought into the customs system – and that will hit internet online purchases made by Americans for goods from abroad.

So what are we to learn from these shenanigans? Are the threatened tariff increases merely being used to browbeat other countries into concessions to Trump? Or is there a coherent economy policy in all this?

There is method in this madness. On the external front, Trump aims to make America ‘great again’ by raising the cost of importing foreign goods for American companies and households and so reduce demand and the huge trade deficit that the US currently runs with the rest of the world. He wants to reduce that and force foreign companies to invest and operate within the US rather than export to it.

He reckons this will boost incomes and jobs for Americans. And with the extra tariff revenues, the government will have sufficient funds to cut income taxes and corporate profit taxes to the bone (indeed, Trump says he wants to abolish income tax altogether). If this is the plan, then the tariffs will eventually be applied fully, with China probably getting an even bigger increase.

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.