THE carnage in overvalued US stock markets on Thursday saw billions of dollars lopped off share prices just days after president Donald Trump paused imposing his 25 per cent tariffs on Canada and Mexico.
This move was aimed at calming the markets, but it had precisely the opposite effect as the market crashed. The crash is being led by the tech industry giants. Since their recent highs, shares in Palantir Technologies have fallen 32 per cent, Nvidia and Microsoft are down by 15 per cent, Alphabet is down by 16 per cent, and Meta and Apple are down by 9 per cent and 7 per cent respectively.
Economists accuse the economic uncertainty caused by Trump’s capricious policy changes from day to day as being responsible for the crash. However, what’s done the damage is the arrival of the cheaper Chinese Deepseek Al programme. This has wiped out investments of hundreds of billions of dollars invested in the US tech industry.
The crash is being described as a ‘fiscal heart attack’ by analysts. The tariffs themselves are a desperate attempt by Trump to raise ready cash to pay the interest on a US government budget debt of $1.8 trillion. In fact the US national debt is now $33.1 trillion.
China has now entered the developing tariff war and has vowed to fight ‘arbitrary’ 25 per cent US tariffs on its exports to the US, declaring its readiness to ‘fight any type of war’ that is necessary with the USA.
Shock waves from the crash sent share markets plunging worldwide, with Japan’s Nikkei down 2.4 per cent, Standard & Poor down 1.0 per cent, Dow Jones down 1 per cent and Nasdaq down 2.6 per cent. The UK FTSE was down 0.4 per cent.
Elon Musk’s so-called Department of Government Efficiency (Doge) has already started a drive to sack hundreds of thousands of US government employees to reduce the US national debt.
Trump’s decision to terminate billions of dollars of US military aid for Ukraine will cut US public spending but has left the EU to face the funding of the Ukraine war alone, an impossible task, that is a recipe for a disaster!
British PM Sir Keir Starmer has promised to increase war spending to 2.5 per cent of GDP and to put UK ‘boots on the ground. . . and planes in the air’ to confront Russia. So much for a peace deal!
In fact, Starmer is militarising the economy to boost growth by funding private arms manufacturing amidst a collapsing UK economy.
This state profligacy will be paid for by vicious cuts to the Welfare State, the privatisation of the NHS, slashing public spending, paying starvation wages, and imposing homelessness and the destruction of basic rights.
Nationally, British industry is in free fall, from the closure of the last oil refinery at Grangemouth, to the closure the last steel blast furnaces at Port Talbot and the mass layoffs in the retail sector.
Chancellor Reeves stepped up her attacks on the over one million unemployed youth on Thursday, saying she wanted to reform the system to get more people into work.
She threatened: ‘Many of those people, I would say the majority of those people, should be working.’ She considers the unemployed to be wasters! She added: ‘And under the plans that we’re going to bring in, they will be working and crucially, they will be given support to get back to work.’ The support that she is proposing is the kind of support of that of a rope supporting a hanging man!
That ‘support’ will be sanctions to force young people into work or to starve, or be conscripted into the army for Starmer’s ‘boots on the ground’ war policies in the Ukraine.
Reeves’ policies to ‘grow the economy’ took a further hit when the giant UK pension funds Aviva, Royal London and Nest declared they will not invest in the UK armaments industries on ‘ethical’ grounds. They of course have very real fears they won’t get their money back.
With Britain going under, the ruling class is lashing out at the working class to finance the resuscitation of their collapsing economy. This is by cutting public spending out of existence and embarking on more foreign wars.
But with the US and the EU split and at each others’ throats, the working class worldwide now has the opportunity to mobilise against the attacks of the class enemy, and abolish bankrupt capitalism with a socialist revolution.
Building the revolutionary leadership of the Workers Revolutionary Party and a mass Young Socialists movement, together with building sections of the International Committee of the Fourth International in every country, is the way forward for defeating imperialism in ‘its death agony’ with the victory of the world socialist revolution!
