Contents "The internationalist proletarian" n.16
THE US WITHDRAWAL PROCESS, AMIDST GAMBLES, BLUFFS AND CAPITULATIONS
US and its zugzwang situation
In chess a zugzwang situation (literally obligation to move, in German) occurs when a side has no move that does not worsen its situation but is forced to play and, with it, to worsen or get into a losing position. As we have repeatedly said, the US can only choose between losing moves and, nevertheless, cannot “pass” but has to move.
The various fractions of the U.S. bourgeoisie present their variants, discuss and struggle to impose one plan or another on the game. And when the plan in course proves ineffective, a change is imposed and a replacement of the driver is made. But, as soon as a fraction dislodges the previously ruling one, it becomes evident that the implementation of its plan also leads to a worsening of its position, executing themselves the materialization of a withdrawal imposed by the development of the productive forces in the rest of the areas of capitalism, by the displacement of the center of gravity of capitalism and by the tendency of the rate of profit to fall which, while generally imposing itself, affects with greater intensity the older capitalisms.
It is not a question of what the US bourgeoisie wants to do, of what it hopes to do or plans to do, but of what it is and will be forced to do. And this is notwithstanding the fact that the different fractions of the bourgeoisie have wishes, illusions and plans, which in turn are subjected to the same determinations that are imposed on their actions and on the result of their actions.
The US cannot recover its hegemonic position through diplomatic and military expansion, nor can it do so through tariffs, just as it cannot solve the effects of its internal social situation through deportations and by consuming only made in America. And yet, they cannot stop trying.
The American Dream
The premise of the so-called “American dream” can be summarized as follows: “if you work hard, you will progress”. This premise is, in general terms, completely false since under capitalism those “who work, acquire nothing, and those who acquire anything do not work” (Manifesto of the Communist Party, 1848).
This question is definitively resolved in the Manifesto of the Communist Party: “But does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation.” (Manifesto of the Communist Party, 1848).
With this “dream” millions of native-born and immigrant proletarians in the US have been fooled for decades, leaving their skin and their lives on the workplace, subjected to wage exploitation, for the accumulation of Capital.
And yet, this premise had its sphere of application. Precisely for this reason it could appear as the carrot for all those who were excluded from that scope. While the US gained positions in industrial production and world trade, while it was able to impose itself on the rest of the contenders (defeated or victors) by appearing late in the two world wars and demonstrating its destructive brutality, while it was able to impose the dollar standard with the Bretton Woods agreements, maintain it with the petrodollars and then through its own inertia, while it has been able to increase its trade deficit and its indebtedness at the expense of the rest; while American capitalism has been able to maintain this expansive trajectory or take advantage of the positions obtained, not only have some crumbs fallen on the tables of the wage earners as a whole, but a part of the labor aristocracy and of the bourgeois classes have been able to prosper and make a career, giving material sustenance to the illusion of the “American dream”.
But this premise (reality for a minority and deception for the overwhelming majority) began to blow up when, instead of this expansive imperialist process, the material reality of the development of the productive forces imposed the rupture of the post-World War II division of the world, the displacement of the center of gravity of capitalism to Asia and the gradual withdrawal of the United States. Thus, the share of the cake not only does not grow but shrinks. The labor aristocracy, the small and medium bourgeoisie, the agents of exploitation see their careers evaporating and are astonished to see themselves sinking instead of climbing. It is a stage in the process of the social slaughter of the middle classes, a necessary prelude to the resumption of the proletarian class struggle.
Tariff panaceas
No measure had ever been announced so loudly as a measure to restore the “American dream”, no measure had been repeated so frequently during the electoral campaign as tariffs, presented as the panacea that would reindustrialize the US, create qualified employment, increase the State's coffers by allowing tax reductions and serve as a negotiating tool to impose advantageous conditions on other States for the US in other areas besides the strictly commercial one.
And however, as we pointed out in the previous issue of the magazine: “There has been one major absence among the measures immediately taken: the absence of new tariffs. (…) Of course, this does not mean that the US will not put the promised tariffs in place after a certain period of time, short or long. However, it denotes the style of the little personage who embodies the current resultant of the jumble of contradictory interests of the US bourgeoisie and is very reminiscent of the barking dog, but not much of a biter. Implicit in the situation of US imperialism is the difficulty of charting a clear course and the condemnation of successive swings in one direction and in the opposite.“ (The Internationalist Proletarian n.15, January 2025, p. 19).
The events that have unfolded afterwards could not be a better confirmation of this characterization of US imperialism.
Bluffs, gambles and capitulations
The sequence of announcements, postponements, withdrawals, denials and promises of resumption on tariffs began like this.
In early February, the US announced a 10% tariff on China, to which China responded with a 15% tariff on coal and LNG and a 10% tariff on crude oil, agricultural machinery and vehicles. Also in early February, the US announced tariffs of 25% on Canada and Mexico and 15% on China. On the day of its initiation, Canada responded by applying tariffs of 25% but during the same day the tariffs on Canada and Mexico were suspended until a month later. A month later, on March 4, the US re-imposed tariffs on Canada and Mexico, increasing the tariffs on China by 20% (in addition to the previously existing 15%, bringing the final rate to 35%). Canada, Mexico and China began to respond.
Canada applied “a 25% rate against products with a combined annual trade value of $155 billion.” (Expansión, 05-03-2025).
Chinese imperialism announced “additional tariffs between 10% and 15% on the import of US agricultural and livestock products, including chicken, pork, soybeans and beef (...) China is one of the main importers of US agricultural products (...).
Immediately, the General Administration of Customs of China decided yesterday to suspend the import of lumber from the United States. It also withdrew the qualification as soybean exporters of three US companies, citing 'ecological safety' and consumer health risks (...) Beijing has added ten more companies to its list of unreliable entities: TCOM, Stick Rudder, Teledyne Brown Engineering, Huntington Ingalls Industries, S3 AeroDefense, Cubic Corporation, TextOre, ACT1 Federal, Exovera and Planate Management Group.(...).” (Expansión, 05-03-2025).
The effects on US agri-food products soon became apparent:
“Corn, wheat and soyabean prices in Chicago have dropped since mid-February, coming under further pressure this week after China and Canada said they would impose a range of tariffs on US foodstuffs. Mexico, the biggest market for US corn, said it planned to announce its own countermeasures this weekend. (…) Wheat, which has slumped more than 17 per cent in three weeks, rebounded 2.1 per cent to $5.60 per bushel following Trump’s decision. Contracts tracking corn, which have fallen 9 per cent in the last month, rose 2.8 per cent to $4.52 a bushel. Soyabeans, which had fallen 8 per cent since mid-February, added 1.5 per cent to 1,017 cents a bushel.
China announced on Tuesday that it would impose a 10 per cent tariff on imports of soyabeans, sorghum, pork and beef from the US, alongside a 15 per cent levy on chicken, wheat, corn and cotton. As the world’s biggest pork producer, China accounts for more than 40 per cent of US soyabean sales. Both soyabeans and corn are primarily used for livestock feed.” (Financial Times, 06-03-2025). In the following days, tariffs affecting the automotive industry were postponed for at least one month and all commodities that were part of the US free trade agreement with Canada and Mexico were left out of the new tariffs. Tariffs against China were maintained.
On March 12, the US imposed a general tariff of 25% on steel and aluminum. The US threatened to raise them to 50% for Canada but then left them at 25% as for the rest of the States.
On April 2, announcing it as “Liberation Day” no less, the buffoon in the White House announced tariffs against a list of 34 states. The leader of the hegemonic capitalist state after World War II, which has intervened militarily throughout the world to impose its interests and on this basis has been appropriating an enormous part of the surplus value ripped from the world proletariat by the bourgeoisies of the rest of the states, affirmed undauntedly that: “our country has been looted, pillaged, raped, and plundered by nations near and far, both friend and foe alike”. And then he announced the recovery of the “American dream” through the imposition of supposedly “reciprocal” tariffs (we will see a little later how they were calculated and what they actually represent).
From that moment on, the ground began to spin around the buffoon: US stock markets plunged, the dollar fell, 10-year bonds after an initial rise also plummeted, his political allies implored him to stop the mess, China responded and the EU prepared to do so while other states, between astonished and incredulous, asked for a hearing.
The buffoon and his camarilla were then forced to initiate the withdrawal and to announce a 90-day pause for all countries that had not taken countermeasures, except for China which would see its tariffs increased by up to 125%. The pause was to benefit only those states that had passively accepted the tariff measures, but... the EU had just announced that same day that it would impose tariffs on the US in retaliation. It was then also announced that European imperialism would be exempted from the tariffs for the same period of time.
Not only had the US's reliability as an ally been bankrupted, not only had it become clear that whatever the concession there could be new tariffs, not only had the unpredictable and capricious nature of the buffoon's decisions and the absence of a plan been confirmed, but above all, the weakness of the US in the face of both the tariffs imposed by other capitalist countries in retaliation and in the face of its own tariffs imposed by the US itself (!) on the rest of the States was made evident, and there was no other way but to back down.
This is one more example of history's puppet character of those who delude themselves to be great men and to be deciding the courses of future development: "Either we read history as Marxists, or we fall back on the scholastic masturbations which explain colossal events by the maneuvers of the monarch (who in turn pretends to present them as the effect of an efficient cause, which would be the transmission of the crown to the heir or descendants), or by the exploits of the mercenary chief, who was driven by the intention of being glorified and immortalised by posterity! The link between a conscious foresight, a driving will and a direct result that "shapes" society and history, we consider as forbidden to the individual, not only to the poor christ-molecule lost in the social magma, but above all to the crowned, the one who carries the scepter, the one invested with positions, honors and whose name is marked by titles and capital initials. It is precisely that man who does not know what he wants and does not achieve what he intended, and to whom, if you will excuse the noble image, historical determinism reserves the highest dose of kicks in the ass. If our doctrine is accepted, it is the chief who plays to the utmost the role of the puppet of history". (Foundations of Revolutionary Communism, 1957).
The following days
Subsequent events followed the usual buffoonish course. The US raised tariffs against Chinese imperialism from 125% to 145% but China only raised them to 125%, with the following statement: “‘Given that American goods are no longer marketable in China under the current tariff rates, if the US further raises tariffs on Chinese exports, China will disregard such measures,’ according to the statement (…) In a separate statement Friday, the Commerce Ministry said Washington’s repeated use of excessively high tariffs has become little more than a numbers game (…) ‘It’s become a joke,’ the ministry said” (Bloomberg, 11-04-2025). The US has had to announce in the following days exemptions on Chinese electronic products (smartphones, laptops, hard drives and computer processors and memory chips, as well as flat panel displays), general exemptions for copper, steel and aluminum, and is considering more exemptions for imported vehicles and parts and even “could offer some exemptions to his 10% tariff on most US trading partners.” (Bloomberg, 12-04-2025).
And to conceal these capitulations, the White House continues with the recipe of announcements that are as theatrical as they are deceptive: “China now faces U.S. tariffs of up to 245%, the White House said last night as it unveiled a probe into critical minerals. But that total appears to apply only to two types of goods—electric vehicles and syringes—and isn’t new.
The figure comes from adding Trump’s second-term China tariffs of 145% to previously existing levies. In his first term, Trump put 25% tariffs on Chinese EVs, which President Joe Biden increased to 100% last year, when he also imposed a matching tariff on Chinese syringes.
The 245% total does not reflect any new tariffs, then, but just reflects existing maximum charges. The White House ‘just now decided to add up’ the total tariffs, an official said.” (The Wall Street Journal, 17-04-2025).
With these number games the US remains entertained, while Chinese imperialism continues to take measures where it hurts, in addition to the aforementioned tariffs:
- “Immediately restrict exports of seven types of rare earths
- Launch anti-dumping probe into medical CT X-ray tubes from the US and India
- Halt imports of poultry products from two American companies
- Add 11 American defense companies to an unreliable entity list
- Impose export controls on 16 US firms
- Halt imports of sorghum from a US company
- Investigate DuPont China for suspected antitrust violations." (Bloomberg, 04-04-2025).
The seven affected rare earths are: “samarium, used in optical lasers and powerful magnets; gadolinium, used as a contrast agent for MRI scans; terbium, used in display devices; dysprosium, used in magnets for wind turbines and electric vehicles; lutetium, used in oil refineries; scandium, used in aerospace and yttrium, used in radar technology." (Bloomberg, 04-04-2025).
China has also taken steps to prevent new investment in the US: “Several branches of China’s top economic planning agency, the National Development and Reform Commission, have been instructed in recent weeks to hold off on registration and approval for firms that are looking to invest in the US.” (Bloomberg, 02-04-2025) also targeting the aerospace sector in general and the already badly wounded Boeing in particular: “China has ordered its airlines not to take any further deliveries of Boeing Co. (…) Beijing has also requested that Chinese carriers halt any purchases of aircraft-related equipment and parts from US companies.” (Bloomberg, 15-04-2025).
What effect do tariffs have?
With no intention of exhausting the theoretical explanation in one page, but with the aim of moving away from simplistic explanations of the effects of tariffs and providing a framework for the various examples throughout this article, we will pause to sketch a few notes on the effects of applying tariffs to a set of products:
- If the profit margin of a set of products to which a tariff is applied is high enough, it may be that the prices of these products remain unchanged. In this case, part of the profit is used to pay the tariff, which plays a tax collection function but does not prevent the flooding of the market by these commodities.
If all the products under a tariff have no alternative on the domestic market, and therefore all the competition is subjected to the same surcharge, then the price of this set of products will become more expensive. The profit will stay the same, the tariff will be paid, which will also play here an essentially tax collecting function, and the consumers of these products (whether they are other companies or individuals) will have to bear the surcharge. Depending on the consumption for which these products are destined (constant capital for enterprises, consumption of the great bourgeoisie, consumption of the petty bourgeoisie and working aristocracy, consumption of the working class) they will affect the purchasing power of one or another social class. We can assume that typically at the level of immediate consumption this situation (absence of alternative in the domestic market) will affect mostly the consumption of the bourgeois classes or strata of the labor aristocracy. But wherever there is an absence of alternative in the domestic market in basic products of working class consumption, or this situation affects the constant capital required for the production of specific products of working class consumption, this surcharge will affect the purchasing power of the wages.
The illusion of those who impose these tariffs is that this context is advantageous for the emergence of alternatives in the domestic industry that can wrest a market share from existing companies. In any case, this illusion encounters considerable obstacles, since it does not solve by itself the need for new capital investment, the acquisition of the appropriate technological know-how, access to the raw materials necessary for this industry, advertising investment to change the consumption habit and the advertising previously made, etc.
- If, on the contrary, the group of products subject to tariffs has competition in the domestic market and its profit margin does not allow it to absorb the payment of tariffs, then part or all of that product will be expelled from that market and tariffs will mainly play a role not as a tax-collecting but as an effective instrument in the trade war. We say “effective” in the sense that it alters or affects the course of the trade war, but by no means in the sense that it necessarily produces the results expected by the tariff wall erectors. Multiple cases are possible:
- That the resulting overproduction in the domestic market of exporting capitalism forces a drop in prices which, in turn, redoubles the need to export even at the cost of a significant reduction of the profit margin and the transfer of part of it to the payment of the tariff (a case similar to case 1 previously analyzed).
- That since the imported products are not completely displaced by their alternatives in the domestic market, the higher prices of the imported commodities act in a manner similar to the production of relative surplus value and the domestic industry can sell at that price, adding to its profit an extra profit equivalent to the tariff tax.
- That as a result of the increase in the price of some imported raw materials (product of case 2), the profit margins of specific final industries are stifled, and they have to raise their prices and cede the market to their external competitors or at least are not able to dislodge them as expected.
- That the exporting industry displaced from the domestic market stops consuming part of the raw materials of that domestic market, generating an overproduction of those other commodities.
- That the tariff actions (both those initially imposed or those imposed in response to them) prevent exports generating a domestic overproduction in a situation in which the tariff cannot be absorbed by the profit margin. In this case, the commodities affected may simultaneously be too expensive to sell abroad and their price may sink in the domestic market to the point of making their production unprofitable.
- That the commodities displaced from the tariff-protected market are diverted to other markets, flooding them with devalued commodities.
As it can be seen, in the case of very specific tariffs or in the case of unidirectional tariffs, the outcome can be predicted to a certain degree, but once the pandora's box of the trade war is opened and each major power begins to impose tariffs on the other, the behavior and outcome of each specific action on the trading system under stress falls within the framework of production anarchy and cannot be planned.
And nonetheless, it is foreseeable that in average terms the capitalist powers with the highest rate of profit and productive capacity will stand to gain in the resulting chaos, while the capitalist powers that are pushed to erect defensive walls themselves are the most vulnerable and least prepared for the trade war unleashed. As we have known for some time: “the cheap prices of commodities are the heavy artillery with which it batters down all Chinese [or those of the US...] walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate.” (Manifesto of the Communist Party, 1848).
US expectations
One of the most elementary ideas of the US ruling sector is to use the money raised through tariffs to lower taxes. In their fantasy, without affecting retail prices. The US expectation is set out by the Secretary of the Treasury himself: “With the China tariffs, I am highly confident that the Chinese manufacturers will eat the tariff go up.” (Bloomberg, 04-03-2025).
And indeed this has been the initial intent of companies such as Walmart, which have provoked the intervention of the Chinese capitalist state, although other major retailers are counting on having to raise prices: “Chinese authorities summoned Walmart Inc. executives on Tuesday over reports it asked suppliers to bear rising costs incurred by increased US tariffs (…) Chinese exporters are resisting any moves to cut their prices further as they already have razor-thin margins due to Walmart’s strategy of sourcing goods at a low price to stay competitive. (…) While Treasury Secretary Scott Bessent downplayed concerns about the tariffs, saying Chinese manufacturers will eat the extra cost, big box retailers Target Corp. and Best Buy Co. have warned shoppers should expect higher prices (…).” (Bloomberg, 12-03-2025).
As we have seen, when tariffs affect all competitors in a market across the board, prices tend to rise to compensate for them because the rest of the competitors are under the same conditions. This is the specific case of cosmetics, as one industry executive explains “it is very likely that a significant part of the tariffs will be passed on to the price of the product,” since “practically 100%” of the manufacture of its perfumes and cosmetics is European." (Expansión, 01-04-2025), and it is also the situation in which two-thirds of the companies estimate to be: “Overall, Allianz Research expects around two-thirds of companies to pass on costs to consumers.” (Financial Times, 06-04-2025).
Trickster's game, or the formulas of vulgar bourgeois economics
A.Smith and D. Ricardo could not carry their economic analysis to the end because their conclusions clashed with their class interests. It was K. Marx who pushed the preceding analysis to its ultimate consequences, overcoming the previous deficiencies and revealing the exploitation of the working class and surplus value as the only form of profit as well as the transitory historical character of capitalism as manifested in its tendency of the rate of profit to fall.
Since then, bourgeois economics totally renounced the scientific approach to economics, but dressed up this drift towards vulgar economics precisely with a supposedly scientific formalism.
The most recent development in this trickery of “modern” economic formulation, which has caused many ‘economists’ in the pay of the ruling class to blush or even tear their hair out, has been the announcement of the formula for calculating the alleged “reciprocal tariffs” by the United States Trade Representative's Office (USTR). Here is the published formula:
The variable x represents exports and the m represents imports. The subindex i means that it has a different value for each country.
What about the two additional Greek letters in the denominator? As a first note, the reader will have noticed that the letters ε and φ in the formula do not have the subindex i and, therefore, are two constants that apply to all cases regardless of country or other circumstances such as sector.
As stated in the note published by the USTR “Let ε<0 represent the elasticity of imports with respect to import prices, let φ>0 represent the passthrough from tariffs to import prices”. It may sound profound but the emptiness of the approach is shown when the same source clarifies how the selection of the numerical values of these parameters has been made: “Parameter values for ε and φ were selected. The price elasticity of import demand, ε, was set at 4. (…) The elasticity of import prices with respect to tariffs, φ, is 0.25”.
In other words, parameters have been taken such that ε · φ = 4 · 0,25 = 1. And as is well known, the result of the product of any value by 1 is that same value. By magic, or by convenient manipulation in the selection of values, the two sophisticated concepts cancel each other out.
Even if one takes this formula seriously, which may serve more as an empirical approximation than a causal relationship, anyone would easily see (as we have succinctly elaborated above) that the response in terms of the volume of imports per 1% tariff increase (that is what ε is intended to represent) or the increase in the price of imported commodities per 1% tariff increase (that is what φ is intended to represent), will vary according to the type of commodities, the existence of local alternatives, their production costs, the profit margin of the exporters subject to the new tariff, the competition of other international competitors and their respective costs, margins and tariffs, etc.
Therefore, it is evident that the generic assignment of a static value for any type of commodity, in any country, demonstrates the fallacy and artifice of the approach of those who try to camouflage themselves behind the apparent complexity of the formula.
Until the Second Vatican Council, the Catholic Church affirmed in the Masses that the wine truly became the blood of Christ and the bread his flesh, and to this end it placed the altars facing the wall to give a halo of mystery to the obvious falsehood. Modern bourgeois economics adorns its formulas with Greek letters (in themselves as respectable and useful as the rest of the alphabets when they are not a means for economic legerdemain) with the same objective.
What this formula actually calculates then (after the additional Greek letters are cancelled out) is the trade imbalance between two States: the difference between export and import, divided by import. And it calculates a tariff corresponding to half of this percentage difference. This is the resulting table:
An excuse like any other
What economic sense does it make to impose tariffs according to this formula? As we have seen, it does not even make specific empirical sense for each sector and according to each trade relationship. It is a generic and general gamble that is thrown to the four winds (after several delays and hesitations) with the intention of forcing a negotiating position.
The countries with the greatest trade imbalance with the US (which export more to the US than they do not import) receive, according to this formula, a much higher tariff rate. The expectation of the US ruling faction is that, in order to see the tariffs imposed reduced, the bourgeoisies of these capitalisms will agree to give concessions to the US in a variety of fields.
One example that was quickly showcased as a major victory was Vietnam's willingness to eliminate tariffs on the US. But under the formula used, there would still be a huge trade imbalance.
Can Vietnam, let alone Bangladesh, raise imports of US commodities to their export level? What are the economic bases that would make this miracle possible?
How will US commodities be made cheaper until this is minimally viable for the Vietnamese capitalist economy? How will Vietnamese capitalists and proletarians be forced to need US-produced commodities?
A confirmed forecast
Let us pause and re-read the following clear description contained in the Manifesto of the Communist Party of 1848 of the direction of the development of commerce in capitalism. This situation was under way in 1848, so that it could be observed and recorded, but its most profound value is that at that time for most of the world it was a prediction, a prediction which has been confirmed in an ever more overwhelming and more widespread manner:
“The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country. To the great chagrin of Reactionists, it has drawn from under the feet of industry the national ground on which it stood. All old-established national industries have been destroyed or are daily being destroyed. They are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations, by industries that no longer work up indigenous raw material, but raw material drawn from the remotest zones; industries whose products are consumed, not only at home, but in every quarter of the globe. In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the products of distant lands and climes. In place of the old local and national seclusion and self-sufficiency, we have intercourse in every direction, universal inter-dependence of nations. And as in material, so also in intellectual production. The intellectual creations of individual nations become common property. National one-sidedness and narrowmindedness become more and more impossible, and from the numerous national and local literatures, there arises a world literature.” (Manifesto of the Communist Party, 1848).
It has been clear since then that all tariff fantasies could only collapse in the face of this process, and they can only collapse today in the face of the production volcano.
The tariff bully
The US is used to a weak or non-existent response. Chinese capitalism has been taking tariff imposition after tariff imposition, sanction after sanction, although it was already beginning to respond (see “The Internationalist Proletarian” No.15, January 2025 p.11) but, with the multilateral imposition of tariffs by the US, China has found the general legitimization to deploy all the firepower we have seen above.
Moreover, the US has forced a whole series of capitalist countries (even reluctantly, like the EU) to respond with tariff measures. And, to top it all off, the US has had to back down from its general gamble in record time, revealing its weakness. The other states, even though the tariffs against them have been withdrawn, have learned that they cannot trust the US and this only deepens the already ongoing process of US withdrawal.
The US attack on all capitalist countries without exception is undoubtedly a shot in the foot. One of the main guarantors of Trump's candidacy, Bill Ackman had no choice but to state: “’By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.’” (Bloomberg, 09-04-2025).
What this agent of US capitalism cannot admit is that this process will be imposed by one way or another, because the current situation is yet another moment of US withdrawal from its position of hegemonic capitalist power. Its actions to maintain its dominance or on the basis of this dominance have no other result than to undermine it, forcing the rest of the competitors (“allies” or not) to impose tariffs on the US and/or to tighten ties with each other.
Anxious reactions
Anxious reactions to the scenario ranged from financial analysts, bank and investment fund managers to Republican congressmen and medium-sized companies, each for their own reasons:
“’If people don’t like the dollar, don’t like investing in the US, don’t want to hold an unlimited number of Treasuries; if we just make people mad,’ Marks said, ‘the fiscal situation will be very complicated.’” (Bloomberg, 04-04-2025).
“Texas Senator Ted Cruz said tariffs everywhere ‘would destroy jobs here at home and do real damage to the US economy.’ On his podcast, he warned the levies make Republicans vulnerable to a ‘bloodbath’ in 2026 midterms elections." (Bloomberg, 05-04-2025).
" At Optical Foundry, a Minneapolis-based business with about 50 employees that sells eyeglasses, CEO Rob Rich expects significant cost increases from the tariffs. The company sources from Japan and China, and has already seen its sales in Canada drop by 30% to 40% in the past two months due to backlash from consumers." (Bloomberg, 06-04-2025).
“’Whose throat do I get to choke if this proves to be wrong?’ Senator Thom Tillis, a North Carolina Republican facing a competitive reelection race next year, asked during a congressional hearing Tuesday.” (Bloomberg, 09-04-2025).
“A series of Wall Street executives criticized the plan this week, including JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, who in his annual shareholder letter Monday called for a quick resolution to trade policy uncertainty and warned against a potentially ‘disastrous’ fragmentation of America’s long-term economic alliances.
(…) CEO Elon Musk, who advises Trump, called Navarro a ‘moron’ in a social media post after Navarro called him a ‘car assembler’ rather than a car manufacturer.” (Bloomberg, 09-04-2025).
“Elon Musk hopes for a “zero-tariff” system between the US and Europe that would effectively create “a free-trade zone,” he said on Saturday, days after levies set by US President Donald Trump sent global markets into a tailspin.” (Bloomberg, 05-04-2025).
US assets exodus
The following chart shows the evolution of the three main US stock exchanges since Trump's election victory on November 4, 2024 (rise and fall).
The drop from April 2 to April 17 for the S&P 500 was 7.79%, the Nasdaq fell 7.47% and the Dow Jones fell 6.25%.
And in the following chart the fall of the stock market (S&P 500), the dollar and 30-year US bonds, since the beginning of the dance of tariff announcements and the most drastic fall since the announcement in early April.
The usual swindled
Incidentally, the rise of the US stock markets following Trump's election victory attracted the petty bourgeoisie and the labor aristocracy, while the subsequent stock market crash was brewing: “Individual investors have pumped almost $70bn into US stocks this year even as professional money managers are slashing their exposure to the market“ (Financial Times, 24-03-2025).
These small speculators are the eternal swindled. On the other hand, others were able to sell before the crash and buy on the cheap before the subsequent rise: “Insiders including Meta Platforms Inc.’s Mark Zuckerberg, Oracle Corp.’s Safra Catz and JPMorgan Chase & Co.’s Jamie Dimon cashed out shares worth billions of dollars before President Donald Trump’s tariff announcements roiled markets.” (Bloomberg, 20-04-2025).
“The data indicate that trading volume intensified before his turnaround on tariffs transpired. The world's richest people added $304 billion to their combined net worth on Wednesday, the biggest one-day gain in the history of the Bloomberg Billionaires Index.” (La Vanguardia, 11-04-2025).
Dollar decline
We are interested in analyzing the above-mentioned speculative bubble burst inasmuch as it is specifically a phenomenon related to assets linked to the US and the dollar.
The dollar's decline relative to other currencies is the result of a general distrust of that currency, a distrust that is far from being total. A buffoon's lurches alone will not end the dollar's role as a currency, but this distrust and the need for an alternative are gradually asserting themselves through the actions that US capitalism is forced to take, including these lurches.
The large volume of the dollar markets means that it is not easily replaceable, for example, among other things, because “the size of the US debt market makes it the most liquid in the world, allowing investors to trade large blocks of securities without affecting the price.” (Bloomberg, 28-03-2025).
The euro fell short in its attempt to significantly displace the dollar, but the process of gradual de-dollarization of the reserves of capitalist states is a fact. A weaker dollar would reinforce the drive to diversify the currencies accumulated in reserves. And this, in turn, would put downward pressure on the dollar. The dollar is not simply replaceable today, but the necessary processes are underway: the progressive withdrawal of the US, the erratic sanctioning policy on the basis of the dollar, the development of payment systems and free trade agreements outside the influence of the US, develop the bases which, once sufficient critical mass is reached, can make this replacement possible.
However, a deeper crisis of the dollar would have a chain effect that would impact all capitalisms. As an example: “Almost a quarter of European banks have insufficient US dollar funding to cover their exposures in the currency (…). The EU’s main banking regulator said in a report published on Thursday that 60 out of 267 banks with sizeable US exposures did not have enough dollar funding to cover them.” (Financial Times, 03-04-2025).
Junk bonds and Treasury bonds
“The tariff offensive (...) has triggered the biggest sell-off in the US junk bond market since 2020 (...) The premium demanded by investors to hold speculative-rated corporate debt, compared with that offered by US government bonds (an indicator of default risk), has soared by one percentage point, to 4.45 percentage points, since Wednesday, according to data from ICE BofA. This is the biggest increase since the coronavirus triggered widespread confinements in 2020.” (Expansión, 07-04-2025).
But it is not only junk bonds that have been massively sold, US Treasuries have also suffered a massive sell-off:
“Last week, bond prices rose as stocks fell, apparently due to growing fears of a recession. But this week they have plunged on signs of low demand at a Treasury bond auction.” (Expansión, 10-04-2025).
Normally, the stock market decline is accompanied by an increase in the nominal value of Treasury bonds, as the money obtained from stock market sales is reinvested in an asset considered safer.
What has happened this time is that US bonds have followed the same oscillation as the stock markets (and not the reverse as usual). US bonds they trade a bit like a risky asset. Or, as former Treasury Secretary Lawrence Summers has said, like the debt of an emerging market country.” (Bloomberg, 11-04-2025).
Needless to say how important it is for US economic parasitism that its bonds are perceived by the world's capitalists as the safe asset to buy when speculative business goes bad, and what a serious problem it would be if the opposite dynamic were to set in.
With its massive sell-off, the yield demanded on US bonds began to rise, approaching 5%, although it then fell back to 4%.
This rate is relevant for two reasons. The first is that this is the interest rate at which US debt is financed and its increase means a higher cost of financing in a highly indebted economy. The second is in comparison with bonds issued by other states. The difference between them means that there is a risk premium on the US bond that denotes a growing distrust of the US: it is considered riskier to buy its debt than that of Germany, France or even Spain.
US and China debt
There has been speculation that Chinese capitalism may have been behind the sale of US bonds, although the Treasury Secretary (Bessent) has discarded this.
The distribution of US government debt has the following structure: “China holds $760 billion of US debt and could use it both as a bargaining chip and as an instrument of confrontation by massive selling. However, there is more than 20 trillion, most of which is in the hands of US investors and the Fed. And in the hands of other allies, such as Japan, another trillion.” (Financial Times, 11-04-2025).
In addition to this debt, as we saw in “The Internationalist Proletarian” No. 7 (July 2021, p.12), the US foreign exchange accumulated in Asia (half of which in China) is huge as well, exceeding $7 trillion.
Indeed, this gives considerable firepower to the Asian imperialisms and China in particular, with the nuance that the devaluation of the dollar and the US debt would also have an impact on them. That said, the option of an attack against the dollar from this source should not be ruled out, equivalent to that carried out by the US against the European Monetary System in 1992 or like the one Saudi Arabia threatened to carry out to prevent the law allowing the Saudi royal family to be tried in the US from prospering.
The Fed's interest rates
All these plunges were followed by the outraged call by the buffoonish US President to fire the Fed Chairman for not lowering interest rates. The reason is simple.
A lowering of Fed interest rates should have as a standard effect an increase in the nominal value of the stock market and fixed income (of all capitalized income in fact). This is the reason why the current administration is pressuring the Fed to lower interest rates, in order to mask – with the expected nominal increase – the fall in stock markets and bonds caused by the announcement of indiscriminate tariffs.
In any case, it is too much to suppose that there would not have been a similar movement of outflow of U.S. assets, because the motivation of the runaway of values is structural, it is about the gradual loss of credibility of U.S. imperialism as the hegemonic piece of imperialism in general by its own self-injurious acts.
The needs of high-tech companies
One of the most resounding clashes of the illusion of the current ruling camarilla with reality has been in the field of high-tech companies. These companies had decided to seek shelter behind the faction in favor of the walled-in withdrawal and supported it in the elections, only to discover that their operations and business were literally made impossible by the effect of the tariffs.
As mentioned above, the US government was forced to exclude smartphones, laptops, hard drives and computer processors and memory chips, as well as flat panel displays, from both the 125% tariff in the case of China and the overall 10% benchmark tariff to all other countries. The effect of the exclusion, which was published late on April 11, was backdated to April 5.
What is the volume of this exemption? No more and no less than 22% of China's imports to the US.
“The exemptions cover almost $390 billion in US imports based on official US 2024 trade statistics, including more than $101 billion from China, (…)
The biggest category related to China is smartphones. The US imported smartphones valued at more than $41 billion from China in 2024, or about 9% of total imports from China. Also covered are computers and similar devices, of which the US imported more than $36 billion in 2024.
Altogether the exemptions cover consumer electronics and semiconductors that accounted for about 22% of US imports from China in 2024.” (Bloomberg, 12-04-2025).
Despite having established this exemption, both the President and the Secretary of Commerce promised the public in his theater that “The semiconductor tariffs are “coming in probably a month or two,” Lutnick said.” (Bloomberg, 13-04-2025).
The illusions of certain buffoons collide with the small detail of the INTERNATIONAL DIVISION OF LABOR. The reality is that the US “lacks the rich ecosystem of suppliers, manufacturing and engineering know-how that — for now — can only be found in Asia. (...) Apple’s biggest FATP facilities — short for final assembly, test and pack-out — are massive and incomprehensible to many people outside of Asia. They are almost towns themselves (…) ‘What city in America is going to put everything down and build only iPhones? Because there are millions of people employed by the Apple supply chain in China,’ said Matthew Moore, the co-founder of a startup and a former Apple manufacturing engineer. ‘Boston is over 500,000 people. The whole city would need to stop everything and start assembling iPhones.’. (...)
China is home to millions of people educated in operating machinery and the skills needed to build iPhones — a process that still requires a lot of manual work. ‘The engineering support to run a factory is not in America,’ Moore said. There just aren’t enough students studying STEM, or science, technology, engineering and math, he said. (…)
Chief Executive Officer Tim Cook laid out the reasons for relying so heavily on China during a Fortune magazine event in 2017, saying it wasn’t because of low labor costs. ‘China stopped being the low labor cost country many years ago,’ he said. ‘The reason is because of the skill and the quantity of skill in one location.’ You could fill multiple football fields with state-of-the-art tooling engineers in China, Cook said at the time. ‘In the US, you could have a meeting of tooling engineers and I’m not sure we could fill the room.’ (…)
‘You design the thing, rebuild the factory, and then you only have six months to sell it,’ according to a person with knowledge of Apple’s supply chain who asked not to be identified. ‘The pace of change makes it so much harder to automate.’
Though Apple has indeed diversified production of iPhones, reducing the share made in China to below 90%, it’s difficult to duplicate the process in other countries. Apple production hubs in Thailand, Vietnam, Malaysia and Indonesia are focused on devices like Macs, AirPods, smartwatches and iPads. (…) For now, at least, the Indian factories will help Apple avoid the Chinese tariffs. Already the company has been filling its US channels — its biggest single market — with iPhones made in India, Bloomberg News previously reported. That country could also be enough, at least for now. The estimated 35 million units it’s now making a year could cover a large portion of its needs in the US.” (Bloomberg, 11-04-2025).
And if the international division of labor were not enough of an obstacle and difficulty, the current ruling faction wants to eliminate the so-called Chip Law and break the economic commitments acquired with the manufacturers:
“President Donald Trump called for ending a bipartisan $52 billion semiconductor subsidy prog spurred more than $400 billion in investments from companies like Taiwan Semiconductor Manufacturing Co. and Intel Corp. “Your Chips Act is a horrible, horrible thing,” the president said in a prime-time address to Co Tuesday. (…) On Monday, Trump credited the tariff threats for TSMC’s decision to invest $100 billion in the previous $65 billion commitment. He touted that project in his address Tuesday, referencing the total $165 billion figure. ‘We’re giving them no money,’ Trump said. ‘All that was important to them was want to pay the tariffs.’.” (Bloomberg, 05-03-2025).
Supply chain effects of tariffs
The announcement and imposition of tariffs has triggered various reactions in the supply chain. In the anarchy of commodity production, the law of “every man for himself” is the rule: price increases, preventive stockpiling, suspension of imports, discounts, new investments.
"New York copper traders have also paid a record premium over the London price to buy copper as they seek to secure supply in the face of the possible imposition of U.S. tariffs. The difference between the benchmark New York Comex futures price and the London Metal Exchange price grew by more than $1,254 per ton this week, surpassing its February high of about $1,149, a new record (...) Meanwhile, the red metal has been leaving the network of warehouses managed by the London Metal Exchange (LME). Although the destination of the metal leaving LME warehouses is not made public, US trade data indicate a pickup in copper imports into the country." (Expansión, 21-03-2025).
"Sales of the new Galaxy S25 family of handsets played a key role in Samsung's strong performance in the quarter. This range with artificial intelligence features saw strong demand in the US, driven in part by pre-orders from distributors who wanted to get ahead of potential price hikes stemming from expected import tariffs. Analysts also note that some Samsung customers have stockpiled memory chips in anticipation of possible tariffs. In addition, Chinese companies are stockpiling on fears of new U.S. restrictions on imports of semiconductors for artificial intelligence, including high-bandwidth memory chips." (Expansión, 09-04-2025).
Purchases in the US have also skyrocketed: “The biggest driver of the mini-boom was the rush to buy new cars before Trump’s tariffs on finished vehicles kick in” (Bloomberg, 16-04-2025). But, as can be seen in the previous graph, inventories at all major retailers have increased at a faster pace.
“German luxury carmaker Audi has suspended stateside imports. Sogrape SA, Portugal’s biggest wine exporter, will draw down on a six-month stockpile it’s been building up for this very moment. Swiss drugmaker Novartis AG announced plans to pour $23 billion into American operations over the next five years. And Jeep owner Stellantis NV, which already halted production in Canada and Mexico, will extend employee discounts to customers to bolster sales. (…) To avoid higher costs, Mercedes-Benz Group AG is racing to import higher-end models before anticipated price hikes go into effect, and Volvo Car AB plans to increase production at its South Carolina plant. Volkswagen AG has warned US dealers that it will add import-related surcharges to the sticker prices of vehicles entering the country — effectively shifting the cost burden to American buyers.” (Bloomberg, 12-04-2025).
And in addition to this variety of attempts to survive in the snake pit, business opportunities inside and outside the US can open up for non-US firms:
“Ryder, the CEO of Applied Nutrition Plc, did point to one potential upside of the unfolding trade war: should countries launch retaliatory tariffs against American products, European businesses could stand to benefit. His company has already seen a surge in Canadian distribution, and he expects to find similar traction in Japan and China. (…)
In other cases, European companies already operating in the US could even gain an edge over US competitors that import into the country. Backmarket, a French company that sells refurbished electronics and smartphones, has seen US sales more than double in the past several days, said CEO Thibaud Hug de Larauze. That’s because of anticipated price hikes from companies like Apple, which is doubly exposed to tariffs as it assembles many of its products in China using US-made components, then ships them back to the US. ‘If you put yourself in the shoes of an American consumer, buying reconditioned was already cheaper than buying new,’ he said. ‘Now, it’s going to become much, much cheaper.’” (Bloomberg, 12-04-2025)
The breakup with Canada
The bullying strategy pursued by the US against Canada has pushed the Canadian bourgeoisie to look for other ways out and has allowed it to win interclassist support through the poison of patriotism: “Canadian Prime Minister Mark Carney made it clear a few days ago: ‘We have to reimagine our economy; our historic relationship with the US is over’”. (Expansión, 12-04-2025).
The US will have to deal with a decline in tourism in general and also with the decision to divest Canadian and Danish funds in retaliation for its tariff action:
“Some top Canadian funds are backing away from taking on more US private assets because of geopolitical concerns and fears they will lose tax breaks on their American investments. Canada Pension Plan Investment Board, which has C$699bn ($504bn) in assets, is among those considering its approach. Meanwhile, one of Denmark’s biggest retirement funds has paused new investments in US private equity because of concerns over stability and Trump’s threats to take over Greenland, an executive at the fund told the Financial Times. (…) Another Danish fund is also pulling back. Anders Schelde, chief investment officer at AkademikerPension, which manages DKr150bn (€20bn), (…) said he had started considering “pretty fundamental changes” to his portfolio” (Financial Times, 12-04-2025).
Oil's role in tariffs
One of the reasons for discord between U.S. and Canadian imperialism has to do with oil. Canada sells almost all of its oil to the US and at a discount. This was the case until the completion of the Trans Mountain pipeline fork to load tankers on the Canadian coast:
“Almost every day since the expansion of Canada’s Trans Mountain pipeline was completed in May, a tanker laden with oil sands crude shipped through the line has passed under Vancouver’s Lions Gate Bridge en route to refineries around the Pacific. Those tankers, bound for China and Japan among other markets, mark a significant shift for Canada, which has long been stuck exporting its vast flows of oil solely to the US.“ (Bloomberg, 05-02-2025).
The US tariff attack on Canada has reinforced the projects of its bourgeoisie to gain autonomy in the general oil market and not have to sell all the oil at a discount to the US. There are several projects on the table that include extending the Trans Mountain pipeline, creating another east-west pipeline or pushing forward the natural gas project.
On the other hand, the US has been determined to reiterate its attempt to seize Venezuelan oil, years later. As can be seen in the graph, the US has been increasing its positions.
The remedy found by the US bourgeoisie is to impose a tariff-dressed sanction on any other capitalist bandit who dares to extract oil in Venezuela:
“The US will impose a 25% tariff on any country that buys oil or gas in Venezuela, but will let its multinationals continue to operate in the region. A decision that benefits the US giant Chevron. (...) The 25% tariff on those who buy crude oil from Venezuela will be applied to any commercial exchange with the United States.” (Expansión, 25-03-2025).
One of the contradictions in which the current US government is immersed is the convenience of having cheap oil to compensate for the maintenance of tax exemptions, which conflicts with the oil industry's need for a certain price per barrel in order to be profitable.
“Back in the mid-2000s, petroleum imports accounted for nearly half of the American trade deficit. (…) the shale revolution turned what two decades ago was a nearly $400 billion-a-year oil trade deficit into a $45 billion surplus in 2024. (...) Yet, $50-a-barrel will have another macroeconomic consequence: widening the trade deficit that Trump wants to reduce. Drill, baby, drill doesn’t work at $50-a-barrel – and if the US doesn’t drill, it must import. On Wednesday, West Texas Intermediate touched a four-year low of $55.12 a barrel.” (Bloomberg, 11-04-2025).
One of the achievements of the US with the Ukraine war has been to become “(...) the main energy supplier to the EU, to which it exports between 3.5 and 4 million barrels per day of oil and a maximum of 5.9 million tons of LNG in January 2025, representing approximately 59% of European LNG imports in the last six months.” (La Vanguardia, 24-03-2025).
The truth is that Western imperialism was never able to make its sanctions on Russian oil truly effective. But it is also true that the relaxation of these sanctions is linked to the change in the US approach towards Russia: “As well as vetoing Canada’s proposal to establish a task force to monitor for sanction breaches, the draft G7 statement (…) shows the US pushed to remove the word ‘sanctions’, as well as wording citing Russia’s ‘ability to maintain its war’ in Ukraine by replacing it with ‘earn revenue’.”. (Bloomberg, 08-03-2025).
It is worth noting that “almost 60% of Russia's phantom oil tankers, used by Moscow to circumvent European economic sanctions, previously belonged to Western European firms that did not hesitate to sell them to the Russians. For the most part, they were Greek companies.” (La Vanguardia, 03-03-2025).
Is it possible to contain the production volcano?
Even if the US could block Chinese imports, where will the Chinese commodities that cannot be sold in the US go?
The percentage of Chinese exports to the US has been declining for years:
And yet, China's trade surplus continues to grow.
These commodities are not dumped into the sea, but rather are tried to be sold (with redoubled competition) both in the domestic market and in the rest of the world market, increasing Chinese exports to other countries (see next graph).
Part of these exports are finished products destined for the local market, but another significant part represents a redirection of some supply chains.
Thus, direct tariffs to China cause the final product destined for the US to be assembled in another country, but with components of Chinese origin, or even arrive as finished products to be re-exported to the US.
These countries have already begun to feel the effects of the partial redirection of the flood of commodities and are trying to cope with it:
“Mexico has already raised tariffs on textile and apparel imports from China to as much as 35% (...) Malaysia added a 10% sales tax on online purchases of low-value goods (…) Vietnam’s government, meanwhile, ordered Temu and Shein Group Ltd. to suspend operations in the country last year (…) Countries in Southeast Asia have generally refrained from erecting trade barriers and instead quietly subsidized local producers who’ve run into trouble.” (Bloomberg, 19-03-2025).
In Latin America, too, trade with China far exceeds trade with the US.
Tariffs and China's diplomacy
The first reaction of most Southeast Asian states was not to impose tariffs in retaliation against the US, but to try to negotiate the situation. Despite this, the wake-up call in the face of the attack suffered at the same time by all, led to the following statement “Malaysia, as Asean chair, will lead efforts to present a united regional front, maintain open and resilient supply chains, and ensure Asean’s collective voice is heard clearly and firmly on the international stage, Anwar said.” (Bloomberg, 06-04-2025).
The Chinese president visited Vietnam, where he was received with full honors, and also Malaysia, where he made a statement: “’Together we will safeguard the bright prospects of our Asian family.’ (…) China and Malaysia agreed to enhance collaboration on industry, supply chains, data and talent (…) building a ‘high-level strategic Malaysia-China community.’” (Bloomberg, 17-04-2025). Thailand and Indonesia were not part of the visit because their representatives went to China in February and December. Visits that resulted in “in the deportation of forty Uyghur Islamists who had been in Bangkok for a decade and in the repatriation of more than a thousand Chinese involved in cyber-scamming (...) and in the incorporation of Indonesia – a nickel mine – as a full member of the BRICS group”. (La Vanguardia, 14-04-2025).
In other words, the US moves to isolate Chinese imperialism result in the further integration of the rest of the countries with China. And this, combined with the following global warning sent out by Chinese imperialism, that it: “’resolutely opposes any party reaching a deal at the expense of China’s interests’ (…) If that happens, Beijing ‘will never accept it and will resolutely take reciprocal countermeasures,’ the ministry added.” (Bloomberg, 21-04-2025).
The false Chinese socialism
Although it seems difficult for anyone to still harbor doubts about the capitalist character of China's false socialism, in the following statements regarding the US tariff measures, we have the umpteenth demonstration: “'violate the rules of the World Trade Organization (WTO)', 'harm the rules-based multilateral trading system', ' affect the stability of the global economic order' warned the Chinese government (...) urged all countries to 'adhere to true multilateralism and safeguard the WTO-based multilateral trading system'.” (Expansión, 07-04-2025).
On page 5 of this issue of the review one can read the article “Lessons from the defeat of the Chinese proletarian revolution of 1926-1927” in which it is analyzed how the betrayal and defeat of the Chinese proletarian revolution of 1926-27 created the basis for the bourgeois revolutionary movement of Maoism to mask itself as communist. On the basis of this false Chinese socialism were prepared the conditions on which has developed what is today the first world capitalist power, which declares itself the guarantor of the GLOBAL ECONOMIC ORDER and keeper of the current capitalist TRADE SYSTEM.
The US bourgeoisie is shaking in its boots
On April 15 the official speech was still: “’China needs to make a deal with us. We don’t have to make a deal with them,” White House Press Secretary Karoline Leavitt said Tuesday, reading what she said was a statement Trump dictated.” (Bloomberg, 15-04-2025).
A week later, the previously confident Secretary of the Treasury (see p. 15) stated in “a closed-door investor summit Tuesday that the tariff standoff with China cannot be sustained by both sides and that the world’s two largest economies will have to find ways to de-escalate. That de-escalation will come in the very near future (…). He characterized the current situation as essentially a trade embargo, according to people who attended the session.” (Bloomberg, 22-04-2025).
After this “private” position designed to turn public, the US president rectified his earlier position by saying that he had no intention of firing the Fed chairman and that he had no intention of firing the Fed chairman and “on Tuesday, saying he’d be willing to “substantially” pare back his 145% tariffs on China”. (Bloomberg, 23-04-2025). He was finally convinced “after meeting with executives from Walmart Inc., Home Depot Inc. and Target Corp., who said import taxes could disrupt supply chains and raise the prices of goods (…) Warnings about the potential for empty store shelves within weeks seemed to resonate (…)” (Bloomberg, 23-04-2025).
Although the first reaction of Chinese imperialism has been to play strong in view of the weakness demonstrated by the US, demanding the unilateral withdrawal of tariffs by the US, the fact is that it is also interested in a reduction of tariffs so it cannot be excluded that there will be negotiations. That said, whatever “understandings”, “agreements” or simple pauses may generally unfold following the tariff circus we have discussed, the POWDER BARREL upon which CAPITALISM rests continues to grow steadily and the TRIGGERS of future explosions continue to accumulate unabated. The present instability is not motivated by the psychological profile of individuals, but by the OVERPRODUCTION that feeds and sharpens the COMMERCIAL WAR. In capitalism, only the DESTRUCTION of productive overcapacity can make it possible to relaunch a lasting cycle of accumulation.
WAR is the only capitalist solution to the CRISIS. And the only real alternative to this is the proletarian solution: the ANTI-CAPITALIST SOCIAL REVOLUTION.
Can the US get out of the quicksand?
When we speak of quicksand now, we are referring to the gradual but inexorable process of the withdrawal and decline of the US as the hegemonic power of world capitalism after World War II. The US resembles someone sinking in quicksand whose moves to try to get out of it only sink it faster. And as we have begun by saying, the inevitability of its sinking does not mean that the US can avoid moving to try to get out, thus speeding up the very process.
The question that remains to be definitively posed is whether these desperate acts of the US to escape the quicksand will translate into a military conflict on a world scale, into an internal military outbreak generated by the accumulated contradictions within the US itself, into a decline and implosion similar to that experienced by Stalinist Russia since 1989, or whether, although today it seems a distant probability, it will link up with a RESUMPTION OF CLASS STRUGGLE and the development of the International Communist Party on a world scale that will see the proletariat once again attempt to take the citadels of world capitalism by storm, taking advantage of the instability of the capitalist order to overthrow it, destroying through an authentic COMMUNIST REVOLUTION all the capitalist States of the world, including the false Chinese, Vietnamese or Venezuelan socialism.