Trump's "Make America Great Again" tariffs a case of "be careful what you wish for"

Written by: Ned K. on 5 June 2025

 

(Above: sourced from https://www.cnn.com )

President Trump's tariffs imposed on its main enemy, China, are turning into their opposite. The tariffs imposed were supposed to revive the manufacturing sector in the USA to fulfil Trump's election slogan " Make America Great Again".

However, the Wall Street Journal reports that US-based major car manufacturers and car component companies are seriously considering relocating key car component manufacturing from the USA to China. 

The car component manufacturing most likely to be relocated to China is manufacture of electric motors to gain access to regular supply of the rare earth magnets which are essential components of the electric motors for cars. 

When the USA imposed the tariffs on Chinese made products, China responded by restricting the export of rare earth magnets to car manufacturers based in the USA. Despite the supposed 90-day freeze on imposition of the tariffs agreed between the USA and China, the supply of the crucial rare earth magnets from China has been slow, with US car manufacturers warning that they will have to close down plants.

China produces 90% of the world's rare earth elements essential for the magnets in electric motors and for other goods such as mobile phones. 

The US car manufacturing barons say they have no choice other than moving at least the electric motor manufacturing to China where there will be no restriction on the supply of the rare earth magnets installed in the complete electric motors. The export restriction imposed by the Chinese Government is on the magnets, not on the export of an electric motor manufactured in China.

The US car manufacturers see this as being better than the alternative of shutting down whole production lines in their USA-based plants.

The Wall Street Journal sees the irony in this situation between the competing big powers when it says, "If carmakers end up shifting some production to China, it would amount to a remarkable outcome from a trade war initiated by President Donald Trump with the intention of bringing manufacturing back to the US".

USA After Australia's Rare Earth Minerals

The USA is desperate to find alternative supplies of the essential rare earth minerals. Trump is trying to coerce the Australian Government to guarantee supply of rare earth minerals from the north of Western Australia, and also wants then from Ukraine, to decrease almost total reliance on China's rare earth minerals. In exchange Trump may decide to reduce the tariff on imports of products such a steel and beef from Australia.

Workers Lose Out Whether Free Trade Or Tariffs

The way capitalism in its imperialist stage arranges production and trade, it is workers who lose out. It is workers who lose jobs not only when one imperialist power imposes tariffs, but also when there are no tariffs and "free trade" wins out. Australian workers lost jobs in their thousands when "free trade" enabled manufacturers here to move plants to China and other developing cheaper labour countries in the 1980s through to the closure of the car industry here a decade ago.

Under capitalism, when workers lose jobs due to the anarchy of capitalist production on a global scale, they have to struggle for redundancy payments and have no guarantee of adequate income when redundancy pay runs out (usually capped at 12 or 16 weeks under the Fair Work Act in this country).  For workers who lose their jobs in many other countries, the situation is even worse with no redundancy payments at all.

Trade between countries will continue to occur. Under socialism, trade will still be required but the Australian economy will be based on people's needs first, not profits for a small minority. The surplus produced overall in the country will enable all workers to receive adequate income if there are any periods of unemployment due to changes internally in the economy or due to break down of trade with an external country that is still under capitalism.

USA's tariff war a sign of imperialist power in decline

Written by: Ned K. on 12 April 2025

 

(Source:shenglufashion.com)

As the tariff trade war intensifies between the USA and China, sections of big business in Australia are backing China to come out the winner, at least on the economic front.

In the Australian Financial Review on Friday 11 April, it is reported that Geoff Raby, former Australian Ambassador in China between 2007 and 2011, says that while high tariffs imposed on China by the US government will have some negative impact, "battle- hardened China can survive".

Raby is quoted as saying, "But China has laid the groundwork for a diversified trade base. They do business with every other country in the world.'

Raby goes on to say, "The world still believes that China makes t-shirts and socks, but the real growth areas of their economy are in advanced technology like electric vehicles and complex hardware."

Other spokespersons for Australian-based capitalists are warning that whichever Party wins the coming federal election, they should be aware of China's diversified trade base and its ability to dump Australia as its main source of iron ore if the Australian Government of the day decides to side with USA as the trade war between the USA and China escalates further and even in to military conflict.

Andrew Forrest, the iron ore billionaire is one who warns that China is in a favorable position to switch to African countries as its primary source of iron ore and that China has $32 trillion in cash reserves in US dollars.

The Business Council of Australia top CEOs also are urging major political parties to "ignore push for unity with US against China." (AFR 11/4/2025).

So, sections of big business in Australia can see the writing on the wall regarding the economic decline of the USA, but their solution is to attach themselves to the rising number one imperialist power China, for fear that China will abandon Australia as its primary source of minerals, particularly iron ore.

Their solution leaves workers and other sections of the Australian people in continued dependence on an imperialist power.

The way forward is for an Australia standing on its own two feet in the world. This will only occur when the working class leads the people to an independent socialist country where a balanced economy operates for the people, not profits.

 

US - China Trade War Already Intensifying

Written by: Ned K. on 5 December 2024

 

Rivalry between USA and China has been well under way on many fronts, including trade.

This week the trade war took another turn. On Monday 2 December, the Biden Administration added another 146 Chinese entities to the trade blacklist.

Among the entities are large domestic chip toolmakers and semi-conductor manufacturing plants. According to the Wall Street Journal, this is the fourth time in three years that the US Government tried to restrict China's access to high performance semi-conductor technology.

Just three days later, the Chinese Government imposed a ban on export to the USA of rare earth metals gallium, germamium and antimony. 

Gallium is essential for production of semi-conductors and electronics manufacturing.

Germamium is vital in defence and space applications.

Antimony is a brittle silver-coloured metal used in rechargeable batteries, especially in car batteries.

In the last two years, US corporations imported nearly all gallium and nearly 50% of its required germanium. China has been a main supplier to the USA of these minerals. When US corporations cannot import enough of these minerals they have to rely on the US recycling industry of them for supply.

According to the Wall Street Journal, what surprised US authorities this time was the rapidity of China's retaliation with its new trade bans.

The trade war between the USA and China may intensify further under the Trump administration making job security for workers in the USA even worse than it is now.

As for China's rapid retaliatory response to the USA's expansion of its trade blacklist, this is arguably an indication that Chinese social-imperialism sees itself as more than a match for the huff and puff of its declining imperialist rival.

Chips and barley wars hotting up

Written by: Ned K. on 23 May 2020

Australian farmers grow potatoes and barley which give us hot chips and beer among other products. Now both are caught up in the intensifying trade wars within the chaotic worldwide capitalist "free trade" economies. China, a major importer of barley from Australia slaps an 80% tariff on imports of barley from Australia, accusing Australia of dumping cheap barley in China to the detriment of barley producing farmers in China.  

At the same time, Australian potato growers are "digging in" for an anti-dumping fight with another big power, the European Union which threatens to flood the Australian market with potatoes in the form of frozen french fries. AUSVEG, representing the potato growers, claims that the dumping of frozen french fries from European Union countries is part of the Union's assistance package to farmers worth Australian $1.08 billion.

AUSVEG estimate western Europe has about 2.6 million tonnes of excess potatoes due to the economic downturn during the Corona Virus period. Potato farmers in South Australia and the Riverina would be hit hard if the dumping of french fries goes ahead. It will also affect workers' jobs in potato processing plants which are mainly located in regional areas where full time jobs are hardest to find. 

The pro-US media in Australia has made a bigger story out of the 80% tariff by China on Australian produced barley than the potential dumping of french fries from western Europe. No surprises there. The pro-US media has gone further and claimed  that the 80% tariff put on barley imports from Australia is a political act in retaliation for the Morrison Government colluding with the Trump administration in the blame game on who is responsible for the Corona Virus and the Morrison Government’s demand for a so-called "independent inquiry" in to the origin of the virus.

The 80% tariff announcement was followed by a fear campaign by the media that soon there will be tariffs on imported iron ore, coal and even wine imposed by China.

Maybe that will occur, although unlikely on iron ore, as there is still a high demand for it in China.

Underlying these latest trade skirmishes is the on-going instability of the world capitalist system in its advanced but declining imperialist stage. Despite all the nice words about trade for mutual benefit between countries sprouted by China, the EU, Australia and other countries, the reality is that the biggest capitalist powers in particular act the same way. They look after the economic interests of their own ruling class first.

With respect to China this point has been hidden somewhat by the media blowing up the political motive behind China's 80% tariff on barley.

There is an arguable case that the 80% tariff on barley by China and the very recent reduction in its import of coal is to try and address its own internal economic crisis. The Corona Virus crisis caused among other things a reduction in orders of goods manufactured in China for export.

For example, "in Guangdong, a southern coastal province that alone would stand as one of Asia's top five economies, the situation is getting dire in some labor-intensive sectors that are more China's past than its future. In the dank back alleys of Dongguan, a metropolis with about as many people as New York city, small textile makers are struggling to survive. Thousands of migrant workers have already headed back to China's poorer interior" (AFR 22 May).

This situation is repeated across industrial areas of China with the AFR claiming there are 50 million more out of work since the onset of the Corona Virus and the already existing trade war with the USA.

So, no surprise really to see the Chinese try and quell rising anxiety in the population about the sluggish economy by announcing protection of farmers against barley dumping and now protection of its own coal industry ahead of imported coal.

The timing of the 80% tariff on barley and the reduction in coal imports also came on the eve of the CCP Congress within which there are competing regional and economic sectional interests, as indeed there are in political houses of the bourgeoisie in Australia.

Marx said in his essay on Free Trade words to the effect that if he was asked which he preferred - protectionism or free trade - he went for free trade because it laid bare all the contradictions of capitalism. We are seeing an example of this before our very eyes