Washington’s stiff tariffs levied against Chinese trade are a key part of the U.S. capitalist rulers’ efforts to contain Beijing’s challenge to their weakening domination of a disintegrating world imperialist “order.” Working people in the U.S. have no reason to back the bosses and their government in this confrontation, but have a vital stake in international solidarity with our fellow workers around the world.
Capitalist rulers worldwide, who have faced declining rates of profit for decades, are being driven to cutthroat global competition to grab the biggest amount of wealth produced by the world’s toilers. While the rulers in China boast about their growth, the fact is their economy is in a downward spiral.
Beijing’s vast manufacturing base is dependent on exports to markets in the U.S., European Union and elsewhere. But the Chinese rulers have yet to develop an extensive internal market that can sustain their economy in hard times. This makes them more vulnerable in trade disputes.
In 2021, after the Chinese rulers spent years stimulating widespread property development that many workers could not afford, the bubble burst. This has caused financial stress for indebted local governments, a deflationary fall in housing prices and a growing crisis for working people. The birth rate has declined, the population has begun to contract, family formation has fallen and growing numbers of young workers see no road forward for a productive life.
Youth unemployment climbed to about 20% in June 2024. Then the government changed its method of calculating the figures, reporting the November rate at 16%. China’s rulers also face an aging workforce with a looming pension crisis.
Beijing tries to hide its deteriorating economy behind claims it is meeting its 5% growth target. The regime silenced Gao Shanwen, a prominent economist, after he publicly suggested the reality is more like 2%. Foreign investment has fallen to the lowest point in three decades.
There have been production shutdowns and job cuts. Local strikes and protests are on the rise, as increasing numbers of workers face unpaid wages or job losses.
Millions of workers across China are seeking ways to defend their interests in the face of a repressive, anti-working-class regime.
After President Donald Trump’s April 2 opening salvo of tariffs, he steeply escalated duties against Beijing, with U.S. tariffs on Chinese products reaching 145% and Beijing’s retaliatory levies on U.S. goods hitting 125%. Leading U.S. retail bosses warned that the interruption of supplies would lead to empty store shelves.
The ports of Los Angeles and Long Beach — which handle a big percentage of Beijing’s trade with the U.S. — reported May 4 a 44% drop in docked vessels. As the effects of the slowdown ripple outward, dockworkers, truckers and many related workers will face shorter hours and layoffs.
The Trump administration hopes its offensive will bring Beijing to the table.
The U.S. president said May 2 at some point he will lower tariffs on Chinese imports. China’s rulers “want to do business very much,” he said. “Their economy is collapsing.” In fact, they have already decided to exempt a series of U.S. goods from tariffs, including select pharmaceuticals, microchips and aircraft engines.
Washington-Beijing military tensions
The trade conflict is adding to military tensions between Washington, along with its allies, against Beijing in a contest over dominance in the South China Sea and beyond. The U.S. rulers are determined to defend their decadeslong domination over this lucrative area, which they regard as their prize coming out of their bloody victory in World War II.
Beijing has stepped up the pace of building missile systems and warships. But the U.S. rulers command by far the largest military force in the world. And the Trump administration, with bipartisan support in Washington, is determined not to let the U.S. rulers’ global domination be undermined.
Military spending by all the rival capitalist powers is now rising at the fastest rate since the end of the Cold War, the Stockholm International Peace Research Institute reports. Washington spends the lion’s share at almost $1 trillion. Beijing is next at just under a third of that. The two account for almost half the world’s war spending.
Beijing’s military forces now regularly practice blockading the self-governing island of Taiwan, which Chinese leader Xi Jinping has pledged to take over, if necessary by force. Clashes are flaring between Beijing and Manila over atolls in the South China Sea that both claim. Vietnam and other Southeast Asian governments contest parts of Beijing’s claims there.
The Chinese rulers’ navy is reaching farther into the Indo-Pacific. Three of Beijing’s warships held live-fire exercises Feb. 21-22 off southeast Australia and midway to New Zealand, disrupting 49 international airline flights. Then they demonstratively sailed around almost the whole island continent. Two months later, Canberra responded by sending a warship through the disputed South China Sea.
In the imperialist epoch, trade conflicts can become shooting wars.