THE CHINESE government has said that it is ‘shocked’ after the US government announced plans for massive new tariffs, escalating the trade war between the two countries to the point of explosion.
The US has listed $200bn (£150bn) worth of additional products it intends to place tariffs on, just days after the two countries imposed tit-for-tat tariffs of $34bn on each other’s goods. In total, the new import taxes that President Trump is threatening to impose are almost equal to the value of China’s entire goods exports to the US, worth more than $500bn last year.
A shaken Beijing spokesman described the latest threat as ‘totally unacceptable’ saying it will bring the world economy to a halt. ‘The behaviour of the US is hurting China, hurting the world and hurting itself,’ a spokesperson for China’s commerce ministry said in a statement. The spokesperson also said the government would have to take the ‘necessary counter-measures’. The capitalist world will have to hope that this does not include dumping the $1.2 trillion of US debt that China holds, a move that could crash the dollar and the world’s stock markets bringing the entire world economy to a halt.
President Trump is, in fact, campaigning to make a much weakened US, that can no longer accommodate its trade rivals and carry its NATO allies, ‘great again’ at their expense. He is literally dicing with death. ‘I worry that we could be at a tipping point,’ says Eswar Prasad, a Brookings Institution economist and former International Monetary Fund official with responsibility for China. ‘If the Chinese say “We’re not buying any more Treasuries” this could act as a trigger around which nervous market sentiment coalesces,’ he said. ‘People could start wondering how the US is going to finance its deficit.’
Not content with just attacking China, the US’ trade war president is imposing massive tarrifs on EU exports to the US, and is also demanding that the EU states contribute, as a minimum, 2% of their GDP to building their armed forces that, along with the USA and the UK, constitute the NATO alliance.
Of NATO’s 29 members, just five met that target this year – the US, Greece, Estonia, the UK and Latvia.
Before boarding Marine One to start his European trip, Trump spoke with reporters on the south lawn of the White House, saying: ‘So I have NATO, I have the UK which is in somewhat turmoil, and I have Putin. ‘Frankly, Putin may be the easiest of them all. Who would think! Who would think. But the UK certainly has a lot of things going on.’
Just ahead of his arrival in Brussels Trump hit out at the EU on trade and at his Nato allies for failing to spend 2% of GDP on defence. He was rebuked for his comments by the European Council President Donald Tusk, who accused the president of criticising Europe ‘almost daily’. Tusk said sarcastically ‘Dear America, appreciate your allies, after all you don’t have that many.’
He continued that the EU spent more than Russia on defence, and as much as China. What this statistic means is that combined military expenditure of the US and the EU states is many times greater than Russia and China combined! For his part, President Trump is now seeking to frighten the EU states with the notion that he could make a deal with Putin at the expense of the European Union. Already German Chancellor Angela Merkel has indicated Europe may no longer be able to rely on its US ally, and will have to boost the EU military to defend itself.
There is no doubt that world capitalism is in its greatest ever crisis, hurtling towards economic and military catastrophes. The working class of the world has no interest in trade wars or military campaigns against either China or Russia.
Lenin said that in 1917 the world capitalist chain broke at its weakest link, Russia, whose revolution he estimated to be the beginning of the world socialist revolution. The current desperate capitalist crisis is shattering the chain at many links and creating the conditions for the victory of the world socialist revolution. Now is the time to build sections of the Fourth International in every country.