Trump’s Tariffs Harm Workers Everywhere

US President Donald Trump boasted that his announcement of trade tariffs was “liberation day” and would bring jobs back to the USA. His trade war won’t work and will just make things worse for workers everywhere, including here in Ireland.

In Ireland the tax haven economic model, which socialists have long described as a house of cards, could falter with tens of thousands of jobs at risk. A series of Irish governments have put us in this vulnerable situation by pandering to US corporations. Trump’s tariffs don’t yet include pharmaceuticals but could be extended.

A tariff is a tax imposed by a government on the import of goods. It raises the price of those goods. Tariffs will hit the poorest workers in the USA with the price of essentials increasing. US industry will also struggle with higher import costs for parts.

Production is international and the cheapening of US export goods compared to those of rivals could just be cancelled out when those rivals hit the US with revenge tariffs.

Trump announced 20% tariffs on all goods exported from the EU to the USA. He claimed the tariffs were “reciprocal” but this isn’t true with the US imposing rates much higher than their rivals. Trump mentioned the EU sticks Value Added Tax on goods and that this was unfair- yet VAT is a sales tax on all goods across the board and gives no one an advantage or disadvantage.

Vietnam was hit with a 45% tariff because Trump’s economists didn’t base their calculations on actual tariffs. They said to themselves - America runs a $123 billion trade deficit with Vietnam, the US imports $137 billion worth of goods from Vietnam. Trump’s gang said “that’s 90%!” and half that is 45%.

So they hit Vietnam with a 45% tariff. Trump’s tariff only took goods not services into account. When it comes to goods the US has a deficit with the EU but if services were included it all balances out!

The 54% tariffs on China could end up reducing US imports by 20% - a massive supply side shock akin to the Covid shutdowns. The exploitation of Chinese workers, who produced cheaper goods, led to US consumers getting access to goods that would otherwise have cost more. China’s advances in tech industries have eroded this “gift” to the US economy.

This trade war is about increasing US corporate power, but it won’t work. In the 1930s, when the Smoot-Hawley tariffs were imposed, international retaliation led to a 33% fall in US exports and a collapse of international trade

That doesn’t mean that socialists are for free trade or for protectionism. In 1845 Engels wrote, “We have no intention of defending protective tariffs any more than free trade, but rather of criticising both systems from our own standpoint.”

Socialists take the interests of the working class as key and we criticise both capitalist strategies. Free trade agreements like the CETA deal involved eroding workers’ rights and increased corporate power. Trump wants to achieve the same thing by different means. He doesn’t oppose free trade, in fact he wants all anti-US tariffs dropped.

If global trade falls while capitalists everywhere control the state then workers will be made to pay for Trump’s attempt to bolster US corporate power.

Trump claims he’ll bring jobs back to the USA but most corporations make investment decisions long term and a 4 year Presidential term isn’t long enough for them to completely uproot millions in investment in fixed capital - plant, machinery etc.

Supply chains of US manufacturing are global with many companies depending on imports to create the finished product. So the tariffs could actually cost jobs. This becomes even more likely when retaliation begins from rival powers.

Even those pharmaceutical companies that have promised to return to the US have done so on the basis of a “4 year plan” - exactly the same length as the Presidential term. Each plant requires very few workers and the construction jobs would only be temporary.

A new US semiconductor factory might cost $20 billion to construct but then operates using few workers. Even if tariffs bring new plants, they won’t come with many jobs after construction. Trump’s 2018 tariffs were actually found to have damaged the US steel industry as they were hit with higher input costs and retaliatory tariffs.

The logic behind the tariffs was explained by Stephen Miran, chair of Trump’s Council of Economic Advisers. The dollar is the world’s main reserve currency - this means that most countries hold US dollars or US treasury bonds in reserve in their banks because the dollar is seen as a reliable currency.

The dollar is a strong currency but if it were weaker US exports would be cheaper for other countries to buy. But Trump didn’t want to weaken the dollar and so instead is making goods from other countries relatively more expensive compared to US goods by adding on these tariffs.

The US has a massive state deficit, they spend far more than they take in, but Elon Musk’s cuts are designed to cut state support to workers and the poor in order to avoid taxing the rich. They’ll lose $3 trillion dollars by extending the tax cuts but that’s where their priorities lie- maintaining the tax cuts for the rich and finding the money to run the state through tariffs.

The US worker pays a higher price on all imported goods so that the corporate elite can avoid paying tax. We also have to understand all of these economic wars as preparation for actual war. The US has been falling back as an economic power and they will use every means at their disposal to impose themselves on the world.

The fact sheet produced by the Trump administration wrote that the “concomitant loss of industrial capacity, compromised military readiness.” They wrote that this “vulnerability,” required “swift and corrective action to rebalance the flow of imports into the United States.”

US trade as a share of world trade has been falling and is now 10.35%. It was 14% in 1990. The EU accounts for 29% of world trade. China alone accounts for 12% of world trade. The world is preparing for war and all the economic rivals are arming.

Imperialism is corporate power using violent means to secure resources or take out rivals. War is no accident of personality, it’s built into the very DNA of capitalism. Trump has shown he’s every bit the warmonger Biden and all other US Presidents have been.

The tariffs also attempt to break up worker solidarity. United Auto Workers union bureaucrats are backing Trump but rank and file members are angry that Trump’s tariffs break off the solidarity shown by workers in the USA and Mexico when they’ve gone on strike.

During the 2019 US General Motors strike Mexican auto worker Israel Cervantes, along with many others at a GM plant in Silao, Guanajuato, refused overtime in solidarity with US workers. The Mexican worker leader was sacked for standing with US workers.

As U.S. auto worker Sean Crawford writes: “These tariffs promise exactly zero new factories will be built, but a couple things are certain: vehicle prices will go up, perhaps by as much as $6,400, because auto companies will pass on any tariff costs to car buyers; and production will be disrupted due to decreased sales and logistical wrangling, which likely means layoffs.”

Union leaders have been duped into lining up behind the US boss class because of the promise of jobs. Bureaucrats everywhere have always been willing to line up with the warmongering corporate elite for the sake of a promise of a few crumbs for members while they get their feet under the bosses table.

The jobs won’t materialise because Trump can’t summon up the post-war boom in our modern era of low profit rates. There’s nothing they can do to save a dying system. They will try economic war, military conflict and further pressure on the working class.

Here in Ireland we can no longer endure the insecurity of being subordinate to corporate interests as our establishment prepares to tear up neutrality and offer us up as cannon fodder in future wars.

In the short term we need to demand a plan of action from our unions to defend workers in the face of massive job losses. In the long term we need to put workers in the driving seat of a planned economy.

The Marxist economist Rudolf Hilferding once wrote, the solution lies in “neither protectionism nor free trade, but socialism, the organisation of production, the conscious control of the economy not by and for the benefit of the capitalist magnates but by and for society as a whole.”

But to get an economy that is democratically planned by workers, we need to rise up, we need a revolution.