Trump’s tariffs keep down the global middle class

Trump’s new tariff threats against Vietnam and India are meant to keep developing countries in a weaker position.

Christian Patterson
2019-07-08
Underground Mall

The Trump administration’s tariffs have a similar function to sanctions, but less dramatic. Sanctions are an act of aggression. Tariffs are a diffused minor act of aggression. Under post-fordist neoliberalism, income inequality has increased because of minor tweaks to labor, tax, and social policy over time. Tariffs are a tool to increase income inequality in a similar way on a global scale.

Trump’s tariffs imposed on China are the essential example, because they’re the most impactful, and China is the essential example of a middle class country in the global economy.

Now, Trump is playing whack-a-mole with tariffs against Vietnam. Market Watch writes:

Some evidence has emerged that companies have taken business elsewhere after the 25% tariffs imposed on $200 billion of Chinese goods. According to data from UBS, the first $50 billion of Chinese goods subject to the 25% tariff rate saw a 30% nosedive in exports, and the market share of Chinese exports saw the biggest decline in years.

While the Chinese market share of U.S. imports between October and March dropped by 1.7 percentage points, Mexico’s rose by a half point, and Vietnam’s gained by almost the same, according to the UBS data.

Now, President Donald Trump is saying he might go after Vietnam, as well. […]

“Well, a lot of companies are moving to Vietnam, but Vietnam takes advantage of us even worse than China,” Trump said.

According to the U.S. Trade Representative, the U.S. imported $47.8 billion of Vietnamese goods and services last year, while it exported $10.5 billion’s worth.

This shows tariffs are used to maintain global capitalism. That might sound obvious, but they’re often presented in the American press as non-economic. They’re presented as a tactic to use against our political rivals like China. But if that were the case, we wouldn’t be playing whack-a-mole with concentrations of capital that accumulate elsewhere.

If Trump’s only goal was to help cripple China’s economy, then you’d think businesses moving to another country would be a good thing. But it’s not about China’s economy, it’s about growing concentrations of capital in former objects of Imperialism. It’s about keeping those countries in a more indirect, de facto form of economic Imperialism.

However, since Vietnam has a less strong economy than China, they have to bend to American Imperialist will more.

Bloomberg writes:

Vietnam is buying more U.S. goods to help it reduce a $39.5 billion surplus, after President Donald Trump called the country a trade abuser.

“Vietnam has made great efforts to improve the trade balance between the two countries, increasing imports,” Ministry of Foreign Affairs spokeswoman Le Thi Thu Hang said in a statement late Friday. Vietnam is improving investment conditions for U.S. companies while encouraging Vietnamese businesses to invest in the U.S., Hang said.

This is a maneuver by the US government to strong-arm Vietnam back into the American machine. They’re forcing Vietnam into dependence on the US. This time, it clearly worked. However, Vietnam is still much more under the influence, and in the sphere of, China’s regional capitalist apparatus.

The US is also going after India with tariffs. Reuters writes:

U.S. President Donald Trump on Thursday demanded India withdraw retaliatory tariffs imposed by New Delhi this month, calling the duties “unacceptable” in a stern message that signals trade ties between the two countries are fast deteriorating.

India slapped higher duties on 28 U.S. products after the United States withdrew tariff-free entry for certain Indian goods. Washington is also upset with New Delhi’s plans to restrict cross-border data flows and impose stricter rules on e-commerce that hurt U.S. firms operating in India.

This passage shows how nervous the US government is about former colonies having economic freedom. They not only want to impose tariffs, but they’re outraged by the idea of a country like India being able to apply retaliatory tariffs. This is because, the US government feels these economies shouldn’t have the ability to leverage power through tariffs to begin with, and how dare they try against big daddy America?!

But India is on an economic trajectory that US tariffs won’t be able to stop. Consumerism is massively on the rise there, a great indication that India isn’t just a factory-colony for the West. Gulf Today writes:

Indian real estate sector is looking at 65 million sqft mall supply by 2022. Despite the onslaught of the e-commerce business across the country, malls are still serious business in India. According to ANAROCK’s latest report, retail sector is riding high on the phenomenal rise of consumerism and renewed interest by institutional investors.

Tariffs function the same way neoliberal policy changes function: they indirectly put pressure on the middle part of the economy, to increase income inequality. When the middle class is smaller, and poorer, it helps maintain a more drastic class society.

This is ultimately the goal of capitalists, and capitalism, but typically, capitalists are more measured in their class antagonism. Capitalists love to offer appeasement. Trump isn’t doing any appeasement. He wants to put this growing middle class of countries in the global economy in their place.

But this this train isn’t stopping. China is a regional, major player in the global economy. So is India, Russia, and Brazil, etc. As these countries become more powerful, they have are more able to operate independent of the American-Imperialist system. These countries can support and trade with smaller countries, that are in turn within their regional sphere of influence, more than the larger Imperialist system itself.

Now that US’s tariffs are becoming less effective against countries like China and India, less of the world will be forced into dependence on the US.

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