Only a few decades back, the US imperialism-led capitalist world had been energetically drumming for free trade across the world market without any tariff walls. It would, they said, liberally open up newer markets riding on globalization to make the world live in harmony towards prosperity. Whether the world was tariff free or if globalization could bring prosperity for common people are different questions. But sure enough, drumbeats are gone; to people of even so-called advanced capitalist countries globalization has turned out to be a dreaded phrase synonymous with joblessness, disparity etc.; privatization has recently been equated with hell by the French workers, if not others. In this background, only in the last few months, the same imperialist countries are making an about-turn and frantically imposing or counter-imposing tariffs, calling for economic nationalism, as the imperialist chieftain, the US imperialists, have termed their action while arm-twisting others with veiled or open threats.
Tariff wars begintc “Tariff wars begin”
What precisely is a trade or tariff war? When a nation imposes tariffs, a sort of tax, on imports to protect its domestic industry from inflow of foreign goods and services and when foreign countries retaliate with similar trade protectionism, trade or tariff war sets in, escalates and finally reduces international trade. In this self-annihilating latest agenda, the US imposed 25% tax on steel and 10% tax on aluminium imported from its capitalist-imperialist allies, the European Union (EU), Canada and Mexico since midnight, 31 May 2018. Accompanied by America First slogan of the US President Donald Trump, these were preceded by tariff on imported washing machines and solar panels etc., which Trump had already slapped on China and South Korea earlier this year. The US also talked on levying a 25 percent tax on cars exported from the European Union, as also from Mexico and Canada. The Trump administration justified its act with the argument that since the US imported more from other countries than the latter absorbed American goods, the US was suffering from huge trade deficit which, in turn, has been bringing lots of trouble to the American people for years. He, however, did not fail to provide the US monopolists with huge tax-cuts because of the said deficit. There were other arguments too. Tariff on Mexican cars were meant to force concessions in the NAFTA (North American Free Trade Agreement) talks putting pressure on Mexico. It may be recalled that illegal immigrants are causing the Americans loose jobs was another pet slogan riding on which Trump had won the presidency. That made Mexico a target. Besides Trump moved to launch long-promised punitive measures against $60 billion worth of Chinese goods. On 6 July Trump implemented 25% duties on about $34 billion Chinese machinery etc., threatening more severe steps in terms of a few hundreds of billion dollar on Chinese goods. China warned of immediate retaliation. The matter of fact is, at the same category of quality, Chinese goods are found cheaper as cost of production in China is low because of its three decade long socialist background. The US market is thus flooded with imported Chinese goods, trade deficit of US with China, thus rising to around $375 billion, almost 66% of its aggregate trade deficit. Besides China is accused of sponsoring a unique strain of state-directed, heavily subsidised industrial policy unfairly aimed at snatching competitive supremacy. Cyber-espionage, including illegitimately stealing intellectual property from other countries, particularly the USA, is the third leg of the stool in the US case against China. Here, it cannot be missed that China, now a full-fledged capitalist country with enough economic muscle and hegemonic aspirations are tough competitors in the global capitalist market and they, like all other capitalist-imperialist countries do not always play by the rules, rather practise all the malpractices of the imperialists. Then again who among the capitalist-imperialists are not doing that? It is not yet three months that the world was shocked when companies like Cambridge Analytica or Facebook were accused of data stealing from all over the world and the US giant corporate chief Zuckerberg had to seek apology in public for that. Now the same US is crying hoarse to accuse others of stealing! Bravo!
Close at the heels came the 44th G7 summit of seven top imperialist countries like the USA, the UK, Germany, France, Canada, Japan and Italy, held on 8 to 9 June 2018, in Quebec, Canada. It took no time to expose the extent to which the mutual contradictions among top imperialist powers of the world have reached, how severely disunited the leading capitalist countries are on the strategy to overcome the capitalist crisis. The US President Donald Trump came with a war cry to stick to the already announced tariff measures and to enact stiff penalties if other countries did not agree to drastically reduce or end tariffs on American goods. He threw the challenge: Well, if they retaliate, theyre making a mistake. He added Were like the piggy bank that everybody is robbing. And that ends. Boastfully rubbishing the North Atlantic Treaty Organisation (NATO), created by none other than the USA, as bad as NAFTA, he spat venom saying that US paid close to the entire cost of NATO to help protect countries that rip us off on trade. Clearly, Trump had come to the G7 summit determined to link this question of military spending to trade negotiations, arguing tariffs were essential to protect U.S. national security, to protect workers jobs.
Reactions clearly underlined the US isolation from its hard core allies in the G7. The German Chancellor Angela Merkel dragged Trump before the question who ripped whom, saying We wont let ourselves be ripped off again and again. We will then act too. The French President Emmanuel Macron was harsh to comment that international co-operation could not be dictated by fits of anger and throwaway remarks. In a tight rope walking, the UK Prime Minister Theresa May paid particular tribute to the Canadian Prime Minister Justin Trudeaus skilful chairing of a difficult summit which, at times, had some very candid discussions; she assured that the UK would honour its commitments in the joint communiqué. The European Commission president Jean-Claude Juncker hinted towards retaliatory policies to rebalance the trade situation between European countries and the US following the move by Mr Trump. The host Canadian PM Justin Trudeau held a press conference after the summit, where he had reasserted his opposition to US tariffs on steel and aluminium, and vowed to press ahead with retaliatory moves on July 1. Facing open rebuff , Trump reportedly instructed the US representative not to sign the joint communique. The G7 came to stand out as G6+1.
It was not just war of words. The US had already started acting. The G6+1 summit drew in actions from others. Canada hit $13 billion of US goods with new tariffs. The EU warned of a $ 300 billion hit on US over car import tariffs. Mexico threatened curtailing purchase of American farm products worth $19 billion in last year, causing American farmers anxiety and frustration. Beijing announced on March 23 plans for retaliatory tariffs on $3 billion of US imports, covering 128 products.
Instead of waning , the arm-twisting by the US imperialism and retaliation from other countries continued. On 25 June the US, currently hostile to Iran, issued a strict warning threatening all countries including India and China to stop oil imports from Iran or face sanctions. Business and Finance (4 July 2018) raised fear that Trumps dealing with the OPEC countries may lead even to an oil war with OPEC and Russia. The US also asked India to lessen its dependence on Russian military hardware and stop purchase of defence missile system from Russia to help Indian and US forces work smoothly together. India hit back at the USA over raised tariffs and announced increased customs duty on 29 products imported from the USA. Along with China, India joined ranks in criticizing US protectionism and pleaded for globalization at the annual meeting of the World Economic Forum in Davos. US in their turn, accused India, like China, was unfairly subsidizing their export businesses.
Parallel to this, in the field of upcoming technology industry, concept of a digitally interconnected world is tending to tear apart. Instead Techno- protectionism is gaining ground, with different imperialist-capitalist countries vying for dominance or at least creating some means of their own to control the market. The social- imperialist China is also out on the prowl. The Chinese government has banned some foreign companies like Google and Facebook, creating pressure on other companies to merge with their Chinese rivals and has carved out an alternative strictly monitored internet system with its own brands, rule and culture with a view to ultimately dominating not only the internet, but the worldwide technology industry. Even the EU imposed new data protection rules crafted largely against the US corporate giants like Facebook, as also the Chinese efforts. It is also pondering a new digital market as the foothold for its own European firms. Some Arab countries have also banned foreign services like Whatsapp. Russia, Brazil and other countries are seeking for ways to monitor and control foreign services. The worldwide web of technology stands endangered.
A leading section of the print media cutting across the countries, was at war with the tariff war. The New York Times (17 June) published economist Paul Krugman saying that the most prominent trade war of the 20th century in 1930, ignited by Smoot-Hawley Tariff Act reduced international trade by 60%, undisputedly worsening and prolonging the hardships of the Great Depression, even contributing to the rise of the Nazis. He estimated, the new US tariffs and responses to them could reduce 70 percent of international trade. Republican Senator Benjamin Eric Sasse commented in terribletariffs.com that No trade war has ever worked. 107 Republican lawmakers have signed a letter with a pledge to protect the American economy by saying NO to President Trumps trade war and terrible tariffs. The Guardian from the UK reported in April 2018 that markets were wary. In line with The Economists (8 May) concern about American companies, Workers World (3 July) quoted General Motors (28 June) fearing less investment, fewer jobs and lower wages because of the tariffs, adding that companies using cheaper imported metals like the nail manufacturer will lose and may be on the verge of closing, having already started retrenchment of workers. Harley-Davidson, the celebrated motorcycle manufacturer has announced to move much of its production to Mexico to avoid the retaliatory tariffs from the EU. In general, the WW held that, belying Trumps claim, prices will rise, hitting retired people and fixed income group particularly hard.
The root lies in the intense market crisis of capitalismtc “The root lies in the intense market crisis of capitalism”
The question that naturally appears: what went wrong with the capitalist- imperialist world? Where and why has vanished the hype of globalization- liberalization- privatization prescribed and pushed through across the world as a measure for averting capitalist crisis? As the present sequence of events reveals, the capitalism-imperialism has no answer to it. If US imperialism, once a vociferous advocate of globalization, now speaks of imposing tariffs, others oppose it. On the other hand countries like India and China speak aloud for globalization, while they are charged with imposing unfair barriers. To comprehend such dubious two-faced tactics of the capitalists imperialists, big or small, one must recognize the fact that all of them, the capitalist-imperialist countries stand on one common platform: a terrible market crisis stares at their face at home and globally. At the same time, one must also recall that these capitalist-imperialist powers fought two world wars to get over their terrible crisis of the great depression, to grab the market and dominate over others. But to their utter dismay, after the second world war, one-third of the world dashed out of the clutches of world capitalism and formed the socialist camp. The world market was pathetically squeezed for the imperialists and the crisis was redoubled.
In this background, without going into details, a few words may be relevant to show how market crisis inevitably generates in capitalism. Going beyond classical economics which had held that labour is the creator of wealth or value, Marx showed labour in capitalism inevitably creates surplus value. He showed how in course of using his capital, a form of wealth, the capitalist owner buys specific quantity of labour- power from the worker, but pays the wage for lesser hours, say for 4 hours for an 8 hour labourpower bought, on consideration it is enough for the worker to eke out a living. The remaining 4 hours represent surplus labour which creates a surplus value unpaid to the worker, but accumulated with the owners capital. It implies several things. One, it shows that it is the workers, not the capitalists, who create capital with the help of their labour power. Two, it is the capitalists who usurp the surplus labour and value created by it which accrues into the capitalists profit and capital. Number three, the workers who obviously numerically constitute the majority buyers of products in the capitalist market, are thus deprived of their due wage. This is the capitalist exploitation. Number four, because the workers are paid less than their due wages, they cannot buy all the things they may need or wish to buy. They have barely the means to survive. So in the market it causes a crisis; products are left unsold, accumulated for want of buyers who have not enough purchasing power to buy. The market shrinks, though there are enough products. People need those, but cannot buy. This is the market crisis that capitalism cannot avoid. This is what Marx and Engels, the great leaders of the Proletariat designated as the epidemic of over-production, in their celebrated contribution, the Communist Manifesto, published 170 years back, a few decades earlier than when the two world wars broke out. As crisis deepens, capitalists crave for maximum profit they can accumulate from that crisis-ridden market and so exploit workers more. This ruthless exploitation robs people further of their purchasing power; market is filled more with unsold products, industry stagnates, still severer market crisis takes its root. The capitalists pay, at least a section of workers, a fairly fat wage to keep them on leash, which however soon appears inadequate with the rise of price to fulfill the capitalists greed for profit. The remaining workers are paid not even the subsistence level, are hired and made to work under any terms the capitalists dictate, or be fired. As the workers are hit hard with ever-squeezing purchasing power, the market crisis deepens, over-production overwhelms, smaller industries are swallowed by the behemoths under the garb of merger, downsizing, if not closure. For the workers any or all of these simply mean loss of job, income and purchasing power. Market crisis goes on accentuating. In the same Communist Manifesto, the two great leaders stated: And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented. How prophetic were the words! To get over their crises, the imperialist powers enforced destruction of a mass of productive forces in one world war after the other for the conquest of new markets, only paving the way for more extensive and more destructive crises. Trying all means at their disposal like cordoning off the newly emergent erstwhile Soviet Russia with the help of the military combination of the NATO etc., that Trump now poses to detest, carrying out neo-colonial exploitation of the newly emergent independent countries which were former colonies and attempting to minimize mutual contradictions among the capitalists-imperialists themselves by forming this or that bloc and combination, the world capitalists-imperialists headed by the US imperialists, could not prevent aggravation of the third phase of intense general crisis after the two that produced the two world wars. The US imperialism, virtually unscathed in the wars, extended its political grip over Europe cornering earlier imperialist powers like the UK, France, Germany, etc. In course of time, these European countries stabilizing their war-ravaged economies, tried to regain their position by forming the European Economic Community and then European Union. This gave birth to newer contradictions in the capitalist world between the US imperialists and the European imperialists. Same was the fate of other different combinations, economic or military, different imperialist countries created to defend their interests by keeping a part of the world market under their control. But the more they tried to avert one market crisis in the morning, the more they found to have enmeshed themselves in a fresh one in the evening.
Globalization hyped to solve the market crisis aggravates it further tc “Globalization hyped to solve the market crisis aggravates it further ”
In frantic efforts to avert this ever-deepening market crisis, they started to dream of a global market in a world without the socialist camp. Thus came globalization with free trade across the globe with tariff barriers minimized, if not totally done away with. Initiated in 1990s globalization was firmly placed as a doctrine when the International Monetary Fund (IMF), maintained and monitored by the imperialists, defined its basic aspects. It was accompanied by a bunch of other measures. The General Agreement on Tariffs and Trade (GATT) of 1947 was revived to give way to the World Trade Organization (WTO) on January 1, 1995, ostensibly for a legal agreement for global trade on merchandise, actually for evolving and ensuring the legal sanction for imperialist plunder of the global market. Along with that, the General Agreement on Trade in Services (GATS) brought global trade in service sectors under the control of world capitalist market.
So virtually the entire gamut of human activities and production was brought under the fetters of globalization to tide over the intense market crisis. Different bodies were formed to ensure unbridled capitalist-imperialist exploitation: the G7 of the leading imperialist powers to maintain their grip on the globe, or G20 as an international forum for the governments and their central bank governors from twenty countries including the EU, which was supposed to discuss policy for promotion of financial stability. With these measures the imperialists wanted to prove that they were getting over their crisis.
Shattering of the capitalist world, EU proved a failed experiment tc “Shattering of the capitalist world, EU proved a failed experiment ”
But what has really happened? The world of imperialism totters. Cleavage in G7 makes it G6+1; G 20 is in disarray. Indian monopolists are calling for redrafting the rules of the WTO. The EU which was formed by the European capitalists-imperialists intending to confront the US imperialism, is now a failed experiment on the verge of bursting from the contradictions within itself. As our Party concluded long back, the dream of a single European entity is never going to come about. In a decade or so from its initial euphoria, the EU countries are again in the grip of intense recession, huge budget deficits, soaring sovereign debts borrowed from the market to meet the deficit, fast increasing unemployment, irreconcilable political crisis as the governments attempt frantically to get over it through austerity measures telling further upon people, while doling out peoples money to save the capitalists. Crippled from market crisis, member countries are thinking of coming out, even deciding on exit, Grexit (Greek exit) or Brexit (Britain exit). From peripheral members like Greece, Portugal and Ireland, then Spain and Italy, to even giants like the UK, France and Germany are shaken. Among those which stick to the union, contradictions are mounting between the more powerful, like Germany and the weaker ones, or between the giants themselves to gain control of the Union. Taking advantage of this and in the attempt to sow seeds of disunity, the US has appointed an anti-European unity personality as the ambassador to Brussels, the EU headquarters.
Globalization and peopletc “Globalization and people”
For people of the world, both in the so-called advanced powerful and the relatively weaker capitalist countries, it took hardly any time to realize that globalization is nothing but a deceptive slogan of the imperialist rulers to hoodwink people to continue their capitalist exploitation in a ferocious way. In consequence, wrath, resentment, resistance mounted all over the world, reflected for instance, in the Occupy Wall Street movement of 99% over 1 % in the USA itself, in the Arab Spring movements in oil-rich Middle East , in massive peoples protests including strikes in Europe, for example in France in March 2018 when 200,000 public sector workers went on strike against privatization of public services.
This is the light in which the present war cry, till now so-called trade war, needs to be judged. It is no cry of an errant President, it is the compulsion of the US imperialist rulers, their aggregate interest that Trump is reflecting in his own way. This is the light in which also the responses and reactions of other imperialist countries, their mutual combinations or breakups, among so-called advanced western world countries or those like China and India, need to be seen. Each of these countries are submerged in terrible market crisis, recession, unemploy-ment, trade deficit and such maladies. Now they get over one symptom of the crisis arising from ruthless capitalist exploitation, the other symptom becomes more intense. Their globalization experiment evidently collapsed and as a result, their market crisis has only deepened.
People have nothing to expect from bourgeois experiment intended to bring a change tc “People have nothing to expect from bourgeois experiment intended to bring a change ”
Here one can not miss that both free trade- globalization and protectionism are nothing but ploys for any ruling capitalist class to get over the market crisis. . Has the US, once the votary of globalization, ever been a truly free trade country? NO. The US government talked a lot about free trade but maintained a protective layer of trade barriers across the economic landscape. The pro-free trade Republican President Ronald Reagans administration pushed Japan to unilaterally limit the number of automobiles it exported to the US. President George W. Bush, also free-trade proponent, erected tariffs against foreign steel. Even recently the both major contestants for the presidency in the last election, Hillary Clinton and Donald Trump, notwithstanding some minor differences on trade, questioned American support of multilateral trade agreements and engaged in worker-centric and populist rhetoric on globalization. In essence, with globalization prevailing for years, the once powerful US capitalist economy is now facing all kinds of retardation, degeneration, stagnation and recession.
The present protectionism is the counter- compulsion. Mr. Trump rose to the presidency as the chosen representative of the ruling class to serve the aggregate interest of the US imperialism, entrusted with the task of getting over the market crisis and thus save the capitalist economy from peoples wrath. In this journey to power he rode precisely on this US peoples wrath and resentment against the hard-pressing US capitalism and its corporate oligarchs. Those had been giving way to acute unrelenting recession, mounting unemployment, poverty, joblessness, homelessness and utter cultural ethical degeneration finding expression in frequent mindless killings of innocent people by psychopathic individuals, even brute police atrocities particularly against coloured people and so on. Trump tried to catch imagination of people by playing on peoples sentiment raising the catchy slogans of America first as well as of stopping immigration. The game was evident . With the first he wanted to hoodwink people with the frenzy, that bringing American people out of crisis will be his job. And with the second he wished to shift the onus of the crisis to immigration and influx of immigrants. Now in power, he is using these slogans to pacify the mounting resentment in people. On the other hand, as one of the leading forces of crisis-ridden world capitalism, the US imperialism is fast sliding deeper and deeper down all-pervading market crisis, both internal and external or global. Amidst this, while taking measures to ultimately serve the aggregate interest of the ruling capitalist class, monopolists and their corporate houses, the Trump administration finds peoples resentment far from receding. Hence they take to newer tricks. The US president faces a fresh uphill task of revamping his image both to the people as well to the master, the ruling capitalist class, as a strong man true to his words and serving the US economy in the best possible way. Like any hard-core business tycoon attempting to galvanize his prospective clients with mind-boggling, yet false, claims at the most opportune moment in the market, the US president Donald Trump is trying to take measures that are sure to leave serious ramifications, both domestically and globally. Clamping tariff on a wide spectrum of items affecting all of the USAs main trade-partners and virtually declaring a trade war is one of the latest livewires presented to the world by the Trump administration. No way these tariffs, raised or reduced, are going to solve the problems of the common people of the USA. Rather, already American farmers are shaken with the fear of losing orders or chances of importing their requisites. Companies are thinking of moving to neighbouring countries where there would not be any restrictive tariffs. So in the long run, as experts have already opined , the trade wars will only aggravate the crises. Nor these are going to solve the issue of immigrants, barring separating innocent kids from parents in the most inhuman way. The American people should not forget that it is the US imperialism that once provokes immigration to get cheap labour; at another moment, when unbearable unemployment tends to push the American people against the system, it is the same imperialism that raises the bogey of immigration as the cause of unemployment and calls for inhuman anti-immigration, zero-tolerance policies.
The whole story thus boils down to: Capitalism inevitably gives birth to market crisis; arising out of this insurmountable market crisis, peoples purchasing power is constantly eroded, epidemic of over-production takes its root. It leads to stagnation in industry, to economic recession, which pauperizes people further to aggravate the market crisis. Capitalism took to two world wars to get over the market crisis. The latter simply doubled. It took to developing military-industry complex to artificially stimulate the economy, with the monopolists- arms merchants producing arms and state buying it with peoples money to keep the wheels of industry and profit of arms producers moving. Then it generates war psychosis and even local-regional wars to consume the arms and make room for replenishment to keep the military-industry complex alive. Thus the US, posing the champion of democracy engineered, monitored and undertook endless numbers of wars only to keep its crisis-ridden economy living, be it at the cost of numberless deaths of innocent people. Now faced with grave crisis, it harps on expenses for the NATO, but tries other combinations. To overcome crisis, capitalism prescribed globalization which simply worked the other way. Now it tries protectionism dangerous by itself. It is no cold war between the imperialists and the socialists. It is hot enough from imperialist greed for market in a world without the socialist camp, with both Russia and China, carrying all vices of imperialism. It proves beyond doubt that there is no respite from this crisis within the framework of capitalism, without overthrowing it. This is the historic task mankind faces today and this task cannot be accomplished without uprooting the system through revolution. It can not be done through election held under the auspices of this exploitative system itself, by the state machinery which thrives upon exploitation and deceit. But revolution demands a prolonged preparation, during which mass struggles are to be launched and developed step by step establishing a genuine revolutionary leadership at their helm and making them conducive to final revolutionary struggle. Peoples struggle against imperialist tariff war is a part of those mass struggles.
The present so-called trade or tariff war stems from the conflicts and contradictions among the capitalist-imperialist countries centring round their irreconcilable market crisis. It is meant only to help the monopolists of those countries grab the maximum profit. It has nothing to do with the interests of common people of the respective countries who are exploited and fleeced by the capitalists of their own country, nor people gain anything from it. They should not be carried over by the narrow nationalist slogans in the cloak of economic nationalism or such others. Rather they need to raise the slogan of stopping these anti-people designs, the so-called trade wars. They need to press upon their respective governments to stop these heinous attempts and they need to demand that world trade be carried out on legitimate mutually conducive basis. This is the lesson, the recent tariff war has left in its trail.