{"id":46982,"date":"2025-04-06T16:09:32","date_gmt":"2025-04-06T08:09:32","guid":{"rendered":"https:\/\/chinaworker.info\/?p=46982"},"modified":"2025-04-06T16:09:34","modified_gmt":"2025-04-06T08:09:34","slug":"trumps-trade-war-sends-world-economy-hurtling-towards-recession","status":"publish","type":"post","link":"https:\/\/chinaworker.info\/en\/2025\/04\/06\/46982\/","title":{"rendered":"Trump\u2019s trade war sends world economy hurtling towards recession"},"content":{"rendered":"

Trump has simultaneously massively escalated the long-running trade war with China, and transformed it into a global affair.<\/strong><\/p>\n

Claire Laker-Mansfield, ISA International Political Committee<\/p>\n

(This article was first published on 4 April 2025)<\/p>\n

Since Trump took office, the metaphors commentators typically use to signal profound and dramatic changes in the world have become rather clich\u00e9d. Sea change has followed earthquake, watershed moment has followed seismic shift. None of these can really do justice to the impact of Donald Trump\u2019s announcements in the White House rose garden on 2 April.<\/p>\n

Wednesdays \u2019s announcement represented perhaps the most dramatic change in US economic foreign policy in the country\u2019s history. The consequences around the world can hardly be overestimated. Overnight, the world economy has been set on a path towards a global recession, triggered by a colossal trade war which is escalating by the day.<\/p>\n

The tariffs the US will now levy on its imports have been set to levels not seen since the 19th century. A blanket 10% tariff applies to virtually every conceivable US trading partner on the planet. Even the tiny Pacific Norfolk Island, with its population of 2,188 people, has been included.<\/p>\n

The most punitive measures are reserved for China, which Trump continues to see as US imperialism\u2019s biggest threat. On top of its existing hefty tariffs, China will be hit with an extra 34%. This brings the total burden on Chinese exports to the US to over 60%. Other nearby countries with the closest economic and political ties to Beijing were also singled out for particularly harsh treatment, in order to deepen the damage to China\u2019s economy. Cambodia faces a huge 49% hike in tariffs. Vietnam\u2019s increase is 46%.<\/p>\n

But it isn\u2019t only US imperialism\u2019s enemies that face steep new tariffs. Japan \u2014 arguably the US\u2019s most important ally in the Pacific \u2014 was whacked with a 24% tariff increase. The European Union got 20%. Coming so soon after the fall out over the Ukraine war, measures like these are straining the cohesion of the western imperialist bloc even further.<\/p>\n

EU leaders were remarkably unreserved in their condemnation of the decisions of a US president. The Spanish Prime Minister Pedro Sanchez described it as a unilateral attack. France\u2019s President Macron called it brutal and unfounded.<\/p>\n

The European Commission is already discussing the potential for retaliatory tariffs. Its president, Ursula Von Der Leyen, has declared that the EU is \u201cready to respond\u201d. There are discussions underway about hitting particularly the US\u2019s service exports and big tech. Even the UK, whose government responded with relief and even gratitude at only being included in the blanket 10% bracket, is now drawing up a list of items for potential retaliatory tariffs, though they are more likely to double down on attempts to secure exemption from Trump\u2019s economic warfare via signing a new trade deal on his terms.<\/p>\n

There is a real dilemma here for US \u201callies\u201d hit by Trump tariffs. Weakness tends to invite aggression, making not responding a risky business. On the other hand retaliation threatens to up the ante even further, and deal new hammer blows to the world economy. Yet the signals currently suggest that, despite this, many will lean more towards retaliation.<\/p>\n

Xi Jinping is not nearly so torn. The retaliation by the Chinese regime has been swift and sharp. They have fully matched Trump\u2019s tariff increase of 34%. This points to the potential for an even more accelerated and radical decoupling of the world\u2019s two largest economies.<\/p>\n

\u201cPricing in a global recession\u201d<\/strong><\/p>\n

Trump has simultaneously massively escalated the long-running trade war with China, and transformed it into a global affair. The stock markets have responded to this with the biggest sell off since the pandemic. Trillions were wiped off global indexes in the first 24 hours, with the sell off continuing into a second trading day with no sign of slowing down. Meanwhile, in many countries government bond yields have sharply fallen as investors flee to them as a kind of safe haven. \u201cThe market is doing one thing: pricing in a global recession,\u201d says George Saravelos, currency expert at Deutsche Bank Research.\u201d.<\/p>\n

Stock market price graphs are in and of themselves of little consequence to the vast majority of working-class and poor people around the world. But what these graphs do indicate is what the ruling class itself thinks is going to happen to their system in the near future. The speculators\u2019 predictions for the world economy are clearly dire. And this will have profound real-world consequences which will impact the lives of people all over the world.<\/p>\n

The most extreme and punishing impact of these tariffs will come swiftly in the neocolonial world. Weak domestic consumer markets will be unable to pick up the slack. Millions could be plunged into even more extreme poverty as mass lay-offs take place. This can lead to a massive increase in hunger and in more general conditions of want.<\/p>\n

In the \u201cadvanced\u201d capitalist world these measures will also have a profound impact on day to day life. The price of consumer goods in the US looks set to substantially increase. Protectionism in general tends to be inflationary. This poses the threat of inflation and recession combining across much of the world, a miserable combination for the working class and poor.<\/p>\n

Economic Trumpism wreaks havoc<\/strong><\/p>\n

Part of Trump\u2019s rationale for imposing these tariffs is that he believes that, by cutting off the flow of goods from abroad, he can engineer a boom for manufacturing in the US. But the earliest indications suggest such an outcome is unlikely. Indeed, in the US auto sector the European car giant Stellantis has already announced it is furloughing 900 US workers and moving production to neighbouring countries as a response to the new tariffs.<\/p>\n

The truth is that it would take a huge amount of substantial and sustained investment to reverse the decline in the American manufacturing sector. In the context of uncertainty and recession, it seems unlikely the US capitalist class will be confident enough in their potential returns to take such a leap. Meanwhile, the alternative of the state stepping in as an investor \u2014 by putting up the funds to develop manufacturing infrastructure \u2014 does not currently feature in the vocabulary of Trumpism, quite the opposite.<\/p>\n

It is possible that in response to these tariffs, new deals may be arrived at with certain countries which Trump can claim as victories. It was notable that Canada and Mexico were not hit by harsh new tariffs in this round, though they are still bearing the brunt of more targeted measures announced earlier. Trump was clearly well aware that the immediate impact of these measures would be that stock markets would fall substantially. This was evidently something he was prepared to weather. Nonetheless, it\u2019s not impossible that sustained pressure on the profitability of US businesses, or indeed a major backlash from a section of his MAGA base could still lead to some form of partial retreat on his part. But to turn back entirely would be to show incredible weakness on the international stage. It is therefore very unlikely that a full-scale turn around is on the cards. Indeed, Trump responded to the chaos on 4 April with a post promising \u201cmy policies will never change\u201d.<\/p>\n

Trump\u2019s preparedness to take these measures reflects his greater level of independence from the wider US ruling class, even compared to the way he acted in his first term. The majority of the capitalist class would at the very least favour a far more cautious and gradual approach to increasing tariffs. Most would prefer that measures like this be more exclusively targeted at China and other powers US imperialism counts as enemies. But Trump, like the authoritarian strong men rulers of the past, is not fully under their control.<\/p>\n

Meanwhile, outside of the US, capitalist leaders everywhere have been shaken forcibly. They are desperately struggling to work out how best to operate in the world Trump is dramatically reshaping day by day. Trumpism is trampling over the bones of the dead neoliberal world order.<\/p>\n

Historic class battles being prepared<\/strong><\/p>\n

As Trump tariffs hit, the capitalist class in every country around the globe will do its utmost to ensure that the cost of the economic toll they exact is overwhelmingly placed on the shoulders of the working class. The capitalists\u2019 aim will be to match the return to 19th century tariffs with a return to something not too far off 19th century living standards. Simultaneously they are diverting new record sums to the war industry, as global militarism is turbocharged under Trump 2.0. Yet this can and will provoke enormous and mighty struggles of the working class.<\/p>\n

Alongside the rise of reaction, the stage is being set for huge new and revolutionary struggles.The workers\u2019 movement needs to rapidly accelerate the process of rearming itself for this battle. In particular, it is absolutely essential that strong new working class parties and forces are now built around the globe \u2014 rooted in struggle.<\/p>\n

Wherever ISA has a presence, we are using what influence we have to help fight for such forces to be developed, and for them to be based on a socialist programme. Crucially, amid rising nationalism, we champion working-class internationalism. We stand neither for protectionism nor for capitalist globalisation, which in a different way also subjugates, exploits and impoverishes the masses \u2014 especially in the neocolonial world.<\/p>\n

ISA fights instead for an international, socialist plan for production, based on public ownership and workers\u2019 democracy. Amid the turmoil and disaster of 2020s capitalism, the urgency of this programme has perhaps never been greater. We urge all those who understand its necessity to get involved in building the forces of socialist change around the world.<\/p>\n","protected":false},"excerpt":{"rendered":"

Trump has simultaneously massively escalated the long-running trade war with China, and transformed it into a global affair. Claire Laker-Mansfield, ISA International Political Committee (This article was first published on 4 April 2025) Since Trump took office, the metaphors commentators typically use to signal profound and dramatic changes in the world have become rather clich\u00e9d. […]<\/p>\n","protected":false},"author":12,"featured_media":46980,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[148,124],"tags":[6124,3435],"class_list":{"0":"post-46982","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-international","8":"category-news","9":"tag-donald-trump","10":"tag-economy"},"yoast_head":"\nTrump\u2019s trade war sends world economy hurtling towards recession - China Worker<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chinaworker.info\/en\/2025\/04\/06\/46982\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Trump\u2019s trade war sends world economy hurtling towards recession - China Worker\" \/>\n<meta property=\"og:description\" content=\"Trump has simultaneously massively escalated the long-running trade war with China, and transformed it into a global affair. 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