STOCK MARKETS across the world crashed following US president Donald Trump finally revealing the details of his trade war against the world.
The speculators and global investors are dumping shares worldwide as they see an immediate future of corporations and large companies going bankrupt overnight as a result of Trump’s war to crush or subdue America’s economic ‘enemies’ across the world.
China, held by Trump and the US ruling class to be their biggest enemy, was hit with 34% tariffs on all exports to the US.
This is on top of the 20% on all Chinese imports already put in place, bringing the total up to 54% on all Chinese goods.
Hardest hit were countries in Asia who faced some of the highest tariffs, including Myanmar which has been devastated by the recent earthquake and is in the middle of a revolutionary struggle to overthrow the military dictatorship.
The BBC reports that Heard Island and McDonald Islands, a group of barren uninhabited volcanic islands near Antarctica with no known exports to the US, have been hit with 29% tariffs!
Across the board, Trump is imposing a blanket 10% tariff on exports to the US from all countries, with its perceived enemies getting hit hardest.
The EU, which Trump claims was created to ‘screw’ America, is to have a 20% tariff while the UK is to get the baseline 10% increase.
Labour PM Keir Starmer was yesterday reported to be boasting that his ‘special relationship’ with Trump had spared the UK from the economic devastation the EU countries now face.
This ignores the fact that the UK is still hit in addition to the 10% tariff with the 25% increase in exports of steel and cars tariffs which Trump has already announced – the kiss of death for the UK’s collapsing manufacturing industries.
While Trump launched a trade war to bankrupt American rivals and tear up the capitalist world order, the effect of his tariffs will rebound with a vengeance on American workers with the prices of goods shooting through the roof.
Already the EU, China and others – not Starmer who is still terrified of offending Trump – are set to retaliate against American imports and services.
The driving force behind Trump’s declaration of a trade war that has completely shattered the old world order of peaceful trade relations, is the gigantic crisis of a US capitalist system drowning in debt, currently running at over $36 trillion, on which it pays $1 trillion a year in interest payments.
Trump boasts that all the money from tariffs will pay off the US debt, while in reality even optimistic bourgeois economists predict will only produce $800 billion, and this money will come from the pockets of US workers in the form of rocketing price inflation.
Resorting to trade war in a doomed effort to bail the US out of recession is not new. In 1930 the US adopted the infamous Smoot-Hawley Tariff Act as its protectionist response to the massive crisis sparked by the financial crash on Wall Street in 1929.
While bourgeois economists agree that the Smoot-Hawley Tariff Act didn’t cause the great recession that crushed America in the 1930s, it massively increased the effects of the Great Depression and accelerated the collapse throughout the world as other trading partners took retaliatory action.
Today, the crisis of world capitalism is vastly more acute than in the 1930s with world trade relying on complex supply chains that mean a car built in the US relies on parts imported from Mexico, Canada and Japan amongst others.
The main defining difference today, is that world capitalism faces a powerful and undefeated working class which will never accept being driven back to the starvation conditions of the Great Depression era to keep a bankrupt, historically redundant capitalist system from total collapse.
The working class internationally has the strength and power to resolve this historic crisis by smashing capitalism through the organisation of mass general strikes to bring down their capitalist governments, going forward from the general strike to taking power and establishing a worldwide socialist planned economy.
World capitalism is tearing itself apart and the urgent task today is building sections of the International Committee of the Fourth International in every country to organise the victory of the world socialist revolution.
