17th April 2025
US President Donald Trump pointing in which direction the US economy is heading
In the midst of the apparently chaotic approach to the international economy taken by United States President Donald Trump, there is an underlying objective which was made clear by the Wall Street Journal this week. The newspaper cited internal sources in the Trump administration confirming that the plan is for the US to use “ongoing tariff negotiations to pressure US trading partners to limit their dealings with China.”
The Wall Street Journal states that,
“U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China to ship goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies.”
The so called Liberation Day ‘reciprocal’ tariffs, announced on 2nd April, saw the US propose a wide range of tariffs upon trading partners based upon the trade deficit they had with the US, a methodology which famously included the Heard and McDonald Islands, only inhabited by penguins.
The British government, far from being outspoken in opposition to the tariffs, expressed relief at only being in the 10% tariff band, a category which is now occupied by everyone but China, faced with an outrageous 145% tariff on goods exported to the US. The 90 day hiatus on implementation of the tariff bands subsequently announced by Trump is supposedly to give countries the opportunity to negotiate.
What this means in reality is that those countries who rely significantly on trade with the US are expected to bend the knee to US imperialism or be hit with more punitive action once the 90 days is up. In particular, the negotiations will be a means by which the US tries to compel nations to limit their dealings with China.
The US is used to getting its own way, either through economic manipulation of international bodies such as the International Monetary Fund (IMF) and World Bank, or through the use of military force.
The clearest example of economic pressure is the illegal blockade of Cuba, which has stood up to US imperialism for over 60 years and continues to survive in spite of the attempts of the US to strangle its economic development.
More recently the US has adopted similar tactics in relation to Venezuela in an effort to enforce regime change. Threats to annexe the Panama Canal and take over Greenland are current indicators of US intentions, while the people of Libya, Iraq, Afghanistan and Syria can attest to the fallout of direct US military intervention in the Middle East. The people of Gaza and the West Bank are the ongoing victims of the genocide perpetrated by the US’s proxy in the Middle East, Israel.
The unipolarity which US imperialism enforced following the defeat of the Soviet Union in the early 1990’s is now threatened by the rapid economic development of the Chinese economy.
The latest World Economic Outlook data, published by the IMF in January 2025, indicates growth of 2.7% for the US in 2024, the EU at 0.8%, Britain at 0.9% and China at 4.8%. While this only provides a snapshot it is indicative of the trend globally, that capitalism as a model is failing and that economies structured with more centralised state control are on the ascendant.
In recognising this the US trade war, launched by Trump, is a clear attempt by the US to bully so called ‘allies’ back into the US camp. The pressure upon members of the NATO Alliance to increase their military spending to 5% of GDP is also part of this strategy. Not only will public services across much of Europe be impoverished but the main beneficiaries will be the US arms dealers who have access to the most up to date weapons technology.
China’s response to US tariffs has been to impose tariffs of its own, at 125%, on US goods imported into China. Chinese President, Xi Jinping, has undertaken a tour of Southeast Asia this week, as part of an anti-tariff campaign and offering a more stable alternative trading partner to US uncertainty.
As part of the BRICS (Brazil, Russia, India, China, South Africa) Alliance, China is already engaged in a process of exploring alternatives to the US dollar as the default international currency measure. The Global South generally is suspicious of US actions and intentions in relation to both economic issues and military threats.
While tariffs will undoubtedly hit the Chinese economy the capacity of China to withstand the impact is arguably greater, as it can more easily replace what it imports from the US from other sources. US exports to China are heavily agriculture focused such as soya beans, cotton, beef and poultry. Conversely the US relies on China for imports of electronics, machinery and processed minerals, far more difficult to source from elsewhere.
Also, as a result of tariffs imposed upon China in Trump’s first term, China has consciously reduced its share of imports from the US, down from 21% in 2016 to 13.4% in 2024, all of which underlines why the US is also putting pressure upon so-called allies to reduce trade with China.
China controls more than two thirds of global rare earth production and more than 90% of processing capacity. The US relies on China for many rare earth metals, essential for electric vehicle batteries for example, which means Trump’s trade war could well backfire even more spectacularly than it already has.
The real danger for the world is that if the economic arm twisting tactics of US imperialism do not work the usual recourse is to military force. Anti-Chinese propaganda is now widespread across Western media and the possibility of action over Taiwan could well be the occasion for a military flashpoint. The peace, trade union and labour movement need to be alert to this possibility and be ready to expose the machinations of US imperialism rather than be fooled by the illusion of a US/Britain ‘special relationship’, which will certainly not be special for the working class if world war is the outcome.
Avanti Populo 