On April 2nd, Trump announced a range of new tariffs on goods imported into the United States from almost every country in the world. The Trump administration has implemented a 10% baseline tariff on almost all goods imported into the U.S., with even higher “reciprocal tariffs” on goods from a select group of countries that Trump has targeted. Since then, Trump and his administration have gone on a chaotic, zig-zagging spree of adding tariffs, taking them away, then adding them again, while suddenly exempting different products or industries along the way. As it stands, the biggest escalation is between the ruling classes in China and the United States, where the U.S. has a tariff of 145% on Chinese imports while China has a tariff of 125% on U.S. imports. Where Trump will go next is unclear – he has already hinted that they may end up being much lower. The only certainty is that workers here and around the world will be paying for it.
This means that companies based in the U.S. that import goods into the country must now pay the government a new tax on top of the cost they would normally pay. So with a 10% tariff, if a company normally paid $100 to import an item before the tariff, they now have to pay the government a $10 tax on top of this.
Many everyday items that working people purchase are imported from outside the country and will be immediately impacted. For example, U.S. companies sell many clothes and electronics imported from Asian countries such as Vietnam and China, which have been slapped with large tariffs. Other everyday items like coffee are imported from countries in South America which also face new tariffs.
When tariffs are implemented, they hurt the working class and small businesses the most. First, companies will use them as a justification to raise prices even higher and more frequently since tariffs actually do increase their costs. Even for companies that aren’t directly affected by tariffs, they will still raise prices knowing they can get away with it. This means higher prices for workers that are already dealing with a crippling combination of inflation, high prices and stagnant wages.
And it is also important to understand that tariffs have a negative impact on small businesses much more than large corporations. Large corporations like Walmart can absorb tariffs more easily and don’t have to immediately increase prices, or they can negotiate lower prices on goods to lessen the impact of tariffs since they often purchase goods in massive quantities. Small businesses, on the other hand, do not have the same financial power and flexibility, and are more likely to quickly pass on the increased cost to their customers. If they don’t, they may not survive. The result is the wealthiest and most powerful take some losses but survive, while smaller business can’t afford to take losses and get wiped out.
Increased costs for consumers and businesses, as well as the general uncertainty that tariffs are causing in the economy for businesses could trigger layoffs, economic recession, or even a full-blown global economic crisis. We have already seen signs of this uncertainty and fear from the business community as the stock market has had one of its worse crashes in recent history after the tariffs were announced. Economists and banks like Goldman Sachs, which represent the rich and powerful, are sounding alarms bells and saying a recession is more imminent than ever. While it is true that swings in the stock market have primarily impacted the wealthiest in our society who own the majority of stocks, many workers have their 401k retirement savings accounts tied to the stock market. And when a global recession does hit, it will be the working class around the world who will face the worst of it with inflation, cuts in pay, unemployment, and a dramatic loss of savings. The ultra wealthy have weathered economic crises before, like in 2008 and during COVID, and have come out stronger and wealthier.
The Trump administration claims that these tariffs will incentivize companies to produce goods inside the United States to avoid tariffs, thereby creating jobs. His administration is also claims that many companies will absorb the cost of the tariffs and not raise prices.
This is a fantasy. Tariffs might promote job creation in certain industries, but it is more likely that job creation from these tariffs will be negligible. Because of many advances in technology and production, many jobs that used to be done by workers are no longer necessary. Even if some job gains might occur, they will not be the same jobs or the same number of jobs as decades earlier. In addition, with the rapid development of AI and automation, even if production in some industries moves to the United States, any gains in job growth will hardly be noticed.
And although Trump is spewing his nationalist nonsense, claiming that it was “the Chinese” who took “American” jobs, he and his ruling class buddies are never honest about who really took our work. The historic loss of jobs in the United States that started in the 1970s until today was mainly caused by huge advances in automation, and also because U.S. corporations themselves left for other countries for cheaper production costs. It was not Chinese or Mexican workers who stole these jobs, like the politicians and their news media like to claim. Billionaires and their corporations (all born and founded in the United States) were forced to implement new technology to get the work done with fewer workers, and also consciously chose to close factories and lay off workers in the U.S. because they could underpay, overwork, and exploit workers more profitably in other countries. In their endless pursuit of profit, so-called American corporations eliminated the jobs of millions right here in their own United States.
Corporations and banks here in the United States and around the world are always finding new ways to squeeze an extra buck out of workers.
Trump and this chaotic trade war he and his goons are pushing through show that the ruling class in the United States has been growing weak and desperate compared to previous years. No longer is the United States the sole superpower who can run around the world bullying and pillaging the working class and resources in other countries. Now they must contend with rising imperial powers like China, and to a lesser extent Russia, a Europe that is perhaps less aligned with the U.S., and maybe even new players like Saudi Arabia and others. Protectionism and trade wars show that billionaires in the United States are desperate and are using tariffs and bullying to keep their power. A trade war can very well escalate to a real war, in which workers of every country are the ones to fight and suffer.
The goal cannot be going back to normal and having so-called free trade. Neither protectionism nor free trade will help the working class, but will rather continue to assault workers with sky-high prices, lower wages, and a larger recession. Workers around the world must see that borders, nationalism, and trade wars are used by the billionaires and the powerful in every country to divide and conquer the working classes of the world.
Corporations believe in free trade when they are in a strong position to conquer markets abroad, and protectionism when they want to be protected from their competitors. In neither case do these policies protect workers.
Our struggle for good wages, safe jobs, dignity and a decent life for ourselves and our loved ones will only come when working people see that our enemies are the rich and powerful in our own countries. The solution isn’t fighting trade wars for to protect what the politicians call “our industries” or shooting wars for “our countries.” They have never been our industries or our countries, but belong to the bosses.
At the core, the working class is an international class, from Cleveland to Shanghai, Mexico City to Cairo. The solution is for workers in every country to see we are the ones who suffer under the bosses and that we must fight and struggle together until we are the ones in power, not the parasite billionaires who feed off of our hard-earned labor.
