Economics for Babies #1: Tariffs
Now Made in America (Again): Global Recessions
Yesterday, the Trump administration ended the de minimis tariff exemption for low tax goods, and with it the deluge of shitty products flowing into the country from Temu and Shein, among others. As Trump wages his Global War on Trade1, we should investigate Trump’s primary weapon of warfighting: the tariff.
Unfortunately for me (and, well, the American population), when I first began writing this piece, the tariffs had just been implemented, about a week after “Liberation Day.” Chancellor Trump’s claims during his announcement in the Rose Garden2 were flagrant, as usual, but something that stuck out to me was the assertion that “from 1789 to 1913, we were a tariff-backed nation and the United States was proportionately the wealthiest it has ever been,” an assertion so absurd it withstands scrutiny for hardly a second.
Since Liberation: Zero Day, America has walked back its tariffs and even suspended a number of them for 90 days; however, it is worth delving into why Trump’s rarebrained scheme didn’t and won’t work to ‘bring back American manufacturing.’
Searching for a minute on even the AI-ravaged landscape of Google will reveal the truth about America’s current state of economic affairs: the country has more wealth — or “Abundance” — than ever before; it is simply distributed from the top down3. The problem, unfortunately, for Trump’s ‘theory’ is that the current structure of the world economy is so complex and intervolved that a domestic restructuring is not even guaranteed to “work” given the fact that the global economy is structured around the consumptive power of the American pig at the commodity trough. China will find new pigs; will we find new slop?
If not, and we are indeed still consuming the same foreign inputs, then we are slated to experience an increase in nearly all products, coupled with increased shipping costs, spiraling to a massive inflationary effect on prices across the board.
Even “Made-In-America” products will face increased prices because supply chains exist. Raw materials are not all in the same places. I can’t believe I have to spell all of this out. In order to build things in the first place, you need other things that make up the things you want to build. So you import them. Except now, there are 10% IMPORT TAXES (tariffs) on those manufacturers importing said raw materials.
However, Marx can supply us here with another useful framework, as usual, to divine some intention — or at least instinct — that Trump is speaking and acting toward: that “the characters who appear on the economic stage are but the personifications of the economic relations that exist” in the society4. In the deepest, most calcified reaches of his heart, Trump feels the need to create domestic ability to generate surplus value. He, of course, cannot articulate it any more effectively than he usually does, but his demiurge-businessman instinct to produce something actually hints at a key factor of capitalist production: only commodity production actually makes surplus value5; circulation industry, rentier exploitation, speculative value creation all rest on the modest shoulders of commodity production.
Despite America’s expansion and domination of the world as the first truly capitalist country, China’s ‘socialism with Chinese characteristics’ has metamorphosed a country with a shaky foundation into the bedrock of the global economy through careful exploitation of markets guided by the semi-visible hand of Xi-ist statecraft. But even Marx could not predict the truly world-historic brain chemistry of D.J. Trump, who is too stupid to understand something as simple as trade.
When you give someone money for something, you don’t have that money anymore
Since the 80s, America has degenerated: then, at least a “theory” guided the horrible trade and finance decisions that left millions abroad to starve and destabilized even the imperial labor aristocracy6. Today we have the syphilitic spasms of an aged so-called billionaire to guide our trade policy. Through his trade policy, Trump has exposed his magnificent misread of global capital flows; he literally believes trading is just other countries “ripping us off.”
No, Donald Trump does not have a doctorate in economics. He’s just that fucking stupid.
Neoliberalism is a fake friend. In favor of cheap goods and increased short-term profits7, the elite capitalist class offshored production, trading relatively well-paying, stable factory jobs for a massive wealth transfer and cheaper, more docile production regimes. Now, when capitalist production in America has scarcely survived successive bubblebursts, new tariffs desperately seek to repair this lagging trend — a trend that will only be hastened by these slapdash measures.
The fundamental problem is that the capitalist, as capital personified, cannot see the horizons, the delineations, as clearly as an objective observer of the process. It is impossible to rationalize the actions of a Musk or Trump, actors whose daily existences affirm Marx’s assertion that capitalists generally cannot understand the inner workings of the social and economic relations they exploit. I mean, Donald Trump, the “business president” said we “shouldn’t have supply chains.” What can you even say about that?
No, Donald Trump does not have a doctorate in economics. He’s just that fucking stupid.
Trade is, by definition, an exchange of relatively equivalent values8; the only thing that constitutes a “ripping off” of one trade partner by the other are the social relations that structure that trade. While finance capital and its gnarled limbs may expend a vast initial investment in a neocolonial or non-Western state, the incomparably vaster profits are considered “fair exchange” by social and market forces.
However, these social and market forces are in turn commanded by the economic relations that undergird them. Western capital dominated the rest of the globe through its political-economic policies, such as ‘free trade,’ promulgated by Milton Friedman.
To hear squealing Republican hogs of the American Empire complaining about getting ripped off is absolutely sickening9 given the blood and destruction that accompanied neoliberal economics.
As detailed Vincent Bevins, among others, in The Jakarta Method, the United States’ anticommunism and destabilizing presence in South America, Central Asia, across much of Africa, and even Europe throughout the twentieth century were advanced at the behest of capital interests, such as United Fruit Company, Haliburton, Ford Motor Company and more. American trade policy has always been a smash and grab; a gentle “ripping off” of the Global South countries we destabilized would have been nice in comparison.
Capitalist countries misunderstand the structure of capitalist economics… again
We really gotta drill down on Trump’s quote that America “shouldn’t have supply chains.”
Initially, I flash for a moment to the fleeting dreams of the now-extinct “MAGA Communists,” and I praise our dear leader:
Thank you Comrade Trump, very cool! We are SURELY nationalizing domestic industry in order to rightfully make efficient our dilapidated, cancerous markets? We will be funding high-quality, free healthcare for all of our citizens so they can move into the job markets that they are best suited for, yes? Combining our domestic production with revamped internal supply chains, we will be able to supply even the most destitute Americans with high-quality subsidized housing, correct?
Alas, none of this, naturally, is in the cards. I don’t think it’s even in the deck at this point.
America, whose industrial production, according to those who opine on these things, has been hollowed out and turned into a Jack-O’-Lantern, is currently #2 in the world in industrial output. The problem, however, is that as capitalist production develops, the amount of constant capital10 relative to variable capital11 expands on an ever-increasing scale. Humans mold into mere appendages of massive machinery. Now, the vast majority of American manufacturing is bound up in the production of large-scale commodities, such as planes, cars, weapons, and vape juice. Finance capital, whose interests compel them to seek cheaper and cheaper12 labor inputs, found countries with billions of unprotected workers and laxer labor regulations and went to town.
China, meanwhile, created secondary manufacturing hubs in Chinese Taipei and Vietnam, among others, in order to avoid U.S. tariffs already slated against China by President “Sleepy Joe” Brandon. Ingraining their productive capacities into the larger world’s markets by dominating semiconductors, chips, batteries, and electric vehicles, China’s analysis of the interconnectedness of the world market enabled a reconfiguration of their (and, by force, the world’s) economy that prioritizes citizen quality of life and environmentally-conscious development in favor of free-running finance capital taking the reins.
Trade War Prediction: The Dragon Rises
The analytics don’t support a U.S. victory in a trade war because the team lacks fundamentals; China’s game IQ and championship mentality are incredible assets. And their coach! Look at the chumps the U.S. has in the front office — it’s a disgrace! We trust the bozo who couldn’t make enough masks during a Fr**king Pandemic to produce the first and only RE-industrialization in the history of the world?? Fat chance! I can see the red sun rising now…
Tariffs can be used by a state seeking to bolster domestic production in specific areas, such as Sleepy’s CHIPS binge, but this is clearly not that. The free-traders lost in their own ‘free market’ — a market that was made ‘free’ at the end of an M-16 barrel13. Instead of focusing on the microeconomic market as the main policy goal, China’s developmental macroeconomic policy easily outflanked, outstripped, outmanned, and, now, outguns the United States’. Given the United States’ track record as the global economic hegemon, this is likely a good thing.
Now, America’s decaying elite lash out at the world created alongside their glittering hordes with a bludgeoning tax that will only hurt the fabled American consumer: a bullseye to the big toe with a snub nose.
Almost laughable, until you remember the majority of harm inflicted by this carcinogenic country falls upon the most precarious populations, most egregiously in the form of continued genocide in Palestine. Mirth runs rancid in the face of cruelty.
It goes without saying that, in the last analysis, if my cheap shit comes at the explicit cost of someone else’s humanity, I don’t fucking want it.
- H
The new GWoT; will this one bring as much death and destabilization to foreign nations?
For someone who is bringing war on queer citizens, it’s interesting that he consistently surrounds himself with beautiful flowers.
The Fed reported in Q4 of 2024 that the wealthiest 10% of Americans earned almost 85% of the wealth earned in the country - Fed Data.
Capital, Volume 1 - Chapter 2: Exchange: “In the course of our investigation we shall find, in general, that the characters who appear on the economic stage are but the personifications of the economic relations that exist between them.”
The amount of value created greater than is necessary to pay the wages for that day’s work. For example, if I work 10 hours a day and 9 of those hours are ‘necessary labor time,’ the value that is created in the last hour of the day is the ‘surplus value.’ Under capitalist economics, surplus value extraction and maximization is the sole, overriding goal. More on this in a later Economics for Babies; for more, see Marx, Capital Vol 1 - Part 3: The Production of Absolute Surplus-Value, and Part 4: Production of Relative Surplus-Value
Neoliberalism was pioneered by “Milton Friedman and the Chicago Boys,” who are not a polycule, but a group of fascist Pinochet collaborators who argue that a business should only worry about its stockholder profits.
Surplus value creation, it should be remembered, is the PRIMARY goal of capitalist economics, before even the reproduction of the system itself! Marx, Capital Vol 1 - Chapter 32: Historical Tendency of Capitalist Accumulation.
The people of Gaza have had no food for TWO MONTHS while whinging citizens of the Fourth Reich debase themselves clamoring for overplus capitalist excreta. Contemptible, craven; yet, not unexpected from the entitled citizens that make up this country: everything is invisible until it affects your material circumstances.
Constant Capital is means of production, such as machinery, raw materials, building costs, insurance, etc. Marx, Capital Vol 1 - Chapter 8: Constant and Variable Capital.
and cheaper, and cheaper, and cheaper, and cheaper, and cheaper… ad nauseum, ad finis.
Again, see The Jakarta Method for more about American capitalist interventions.