ON MONDAY the Chinese government issued a document accusing US president Donald Trump’s administration of ‘trade bullyism practices’ that represent the ‘greatest source of uncertainty and risk for the global recovery.’
The document went on: ‘China does not want a trade war, but it is not afraid of one and will fight one if necessary.’ This was the Chinese response to the ramping up of the trade war by US capitalism against China on the day that the US tariffs were increased by 10% on an additional $200 billion (£150bn) of Chinese goods, with a further increase to 25% by the end of the year.
China immediately retaliated by placing increased charges of between 5% and 10% on $60 billion worth of US imports to the country – while being careful to stop short of issuing any new threats against the US.
Over the weekend, China cancelled trade talks – due to take place in Washington which were supposed to lead to a winding down of the trade war – with China’s vice commerce minister, Wang Shouwen, saying yesterday that it is impossible to hold negotiations while the US is putting a ‘knife to China’s neck.’
Over the past few months talks have taken place between China and the Trump administration that the Chinese were led to believe would result in some compromise over the question of the escalation of the trade war, but now it is becoming clear that there will be no concessions, no compromises and no deals – US capitalism is out to break the Chinese economy, smash it up completely and turn China into nothing more than an economic vassal state of the US to be exploited at will.
An editorial yesterday in China’s state-backed newspaper, The Global Times, put it bluntly, saying: ‘China is a big and powerful nation, so whether it is a confrontation with China economically or militarily, it would come at a huge price.’ This is a recognition that if US imperialism can’t break China through trade war it will resort to military means. Historically, trade wars of this depth and severity have always been a prelude to shooting wars.
The Trump administration’s trade war with not just China but with every other country that it regards as a capitalist rival – in fact, every other country on the planet – is a sign of the desperate weakness of US capitalism. Despite all Trump’s boasting about how great the US economy is, with the stock market reaching an all-time high in August, the fact remains that this feverish high has been achieved not on the back of any real growth or economic expansion but has been fuelled entirely by debt.
The debt owed by the federal government this year is over a massive $21 trillion.
Not just the government is up to its neck in debt. Total household debt reached a new high of $13.3 trillion including mortgage debt of $9 trillion – the banking crash of 2008 had as its immediate cause un-repayable mortgage debt of $10.5 trillion, perilously close to today’s rising figure. To make matters worse for US capitalism, the biggest owner of US national debt is China which holds $1.2 trillion.
If the Chinese really do retaliate and dump this debt the dollar would crash overnight along with stock markets, with the US government finding it impossible to borrow the money to prop up their bankrupt system. World capitalism is in its greatest ever crisis with the US ruling class lined up behind Trump to declare it will bankrupt all its rivals and go to war in a desperate effort to survive the carnage of the next crash.
The working class of the world have absolutely no interest or stake in this trade war or imperialist military war against China or any other nation state. The working class internationally is the only force that can resolve this crisis by putting an end to this bankrupt and historically outmoded capitalist system once and for all through socialist revolution.
This makes the building of revolutionary parties of the Fourth International to lead the struggle for power through to the victory of the world socialist revolution absolutely imperative today.
