DEEP splits among the imperialist powers emerged this week over the rapidly growing support for a Palestinian state, at the same time as Trump is threatening the imposition of US trade tariffs on the whole world.
He wants the whole world to pay the bill for the crisis of American capitalism by slashing central bank interest rates to impose the cost of the world crisis onto the backs of the working class of the world.
However, the world has already been horrified by the escalation of the mass murder and starvation of the Palestinian people in Gaza.
Previously compliant supporters of the US government and Israel’s genocidal war on 2.5 million Gazans now openly declare their support for a Palestinian state, knowing that they will be next!
Forced by the growing mass outrage and the increasing militancy of the international working class, the French President Macron, the EU and even the feeble Pro-Israel British PM Keir Starmer have had to make limited protests over the slaughter of Gazans.
Meanwhile US Senators, both Republican and Democrat, are forced to protest against Trump’s funding of the bogus US-Israeli ‘aid distributing agency’, which is no more than a front for slaughtering desperate and starving Gazans desperately seeking food.
Infuriated by Canada’s support for a Palestinian state, Trump immediately punished it by attacking it with increasing tariffs to 35 per cent, in an attempt to destroy its economy and impoverish its working class.
‘Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a trade deal with them. Oh Canada!!!,’ Trump threatened.
‘There isn’t any getting away from the fact this is a huge, huge increase in the US tariff rate,’ says Brian Coulton, the chief economist at Fitch Ratings, astounded at the highest US tariffs since the Great Depression of the 1930s.
However, says Coulton: ‘‘The real economic toll is still yet to come. This will drive up inflation, and dampen real wage growth. In turn, it will drag down consumer spending, the engine of the American economy. It’s certainly a pretty sharp slowdown!’
In fact, European stock markets slumped to a five-week low on Friday after Donald Trump unleashed the sweeping global tariffs, including a 39 per cent levy on Switzerland.
EU stocks plunged by 3.9 per cent, responding to the US president’s demand that the world’s biggest drug makers must lower prices for American consumers, with the FTSE 100 falling 0.6 per cent.
More than £16bn was wiped off the value of Europe’s biggest pharmaceutical companies, falling 3.9 per cent on the FTSE 100 yesterday.
The US president has ordered GSK and AstraZeneca drug companies to ‘negotiate harder with foreign freeloading nations to lower prices for American workers, and pay for it by charging higher prices abroad.
The crisis raises the threat of higher costs for the NHS, which is one of the biggest buyers of pharmaceuticals in the world. Clearly the NHS is already in an existential crisis with resident (junior) hospital doctors fresh from a 5-day strike for a 29 per cent pay rise and with nurses rejecting a 3.6 per cent pay offer this week.
Funding the NHS needs the nationalisation of big pharmaceutical companies and driving the privateers out of the NHS. This, capitalism can never do, and is the reason why we require socialism.
In letters sent to the bosses of 17 pharmaceutical companies, Trump demanded that they ‘negotiate harder with foreign freeloading nations’, and said that ‘increased revenues abroad must be repatriated to lower drug prices for American patients and taxpayers,’
He made clear that he would use tariffs to force through higher prices – and if countries resisted, they would be crushed.
However, in a fresh blow to Trump, the US Federal Reserve has slashed its forecasts for economic growth over the next two years and hiked inflation expectations sky-high.
On Wednesday, expectations for US GDP growth this year were slashed from 1.7 per cent to 1.4 per cent with inflation rising to 3 per cent this year.
Despite Trump’s intense pressure on the chairman of the Federal Reserve Bank’s Jerome Powel, to cut Federal Bank interest rates, it didn’t, and on Wednesday the Federal Open Market Committee (FOMC) voted unanimously to keep interest rates on hold at 4.25 per cent to 4.5 per cent.
Clearly the run-away global crisis of capitalism is fragmenting the unity of imperialism’s ability to survive and is driving it to world war. Clearly only the world socialist revolution can resolve this historic death agony of capitalism. This requires the rapid building of the International Committee of the Fourth International and the Workers Revolutionary Party in Britain. There is not a moment to lose!