By Mick Kelly, Political Secretary, Freedom Road Socialist Organization
On January 20, Trump stood in the Capitol rotunda promising a “golden age” and vowed to stem the decline of the U.S. empire, which in fact is something he will not and cannot do. The opposite is the case. The economic policies he promotes, such as continued decoupling the U.S. economy from that of People’s China and erecting a wall of tariffs, will accelerate the decline of the United States. Increased military spending for the Pentagon or the deployment of more military forces into the Pacific will not change this.
Over the long run, a decrease in economic power will be followed by a decline of political power. The role of the U.S. in the world economy is shrinking. In 1960, the U.S. had about 40% of the world GDP. Today it is about half that, depending on how you measure.
This U.S. has is abandoning projects that put it at the center of the international economy, such as the World Trade Organization. The 2017 withdrawal from the Trans-Pacific Partnership, carried out by Donald Trump days after his first inauguration eight years ago, is another symptom of deterioration. The relative weakness of the U.S. economy is being accompanied by a fragmentation of the world economy.
Looking at statistics from the International Monetary Fund to compare the size of the respective economies, People’s China has surpassed that of the U.S. The metric of Purchasing Power Parity (PPP), which allows one to compare which commodities and services can be purchased with a given currency, indicates that in 2024 China had about 19% of the world GDP and the U.S. had about 14% of the world GDP. One could also look at a host of industries, from auto and to ship building to steel and green technologies, and see that the U.S. is being left behind.
Two issues to consider
We are looking at U.S. policy and plans in the Pacific in general. Two things need to be considered as we try to get a handle on what is coming next.
First, there is a fair amount of overlap on the China policy pursued by Democratic and Republican politicians. We can have some confidence that Trump will be unmatched when it comes to pronouncements infused with chauvinism and xenophobia, such as he did before, calling COVID the “China virus.” While he may well adopt a more extreme anti-China position than the Biden administration, there is a certain continuity in U.S. policy from administration to administration.
For example, when Defense Secretary Austin was testifying on the 2024 defense appropriation bill at the Senate Armed Services Committee, he stated, “This is a strategy-driven budget – and one driven by the seriousness of our strategic competition with the People’s Republic of China.”
The second issue is Taiwan Province, the great unsolved issue of the Chinese revolution. The U.S. has long encouraged reactionary and separatist forces on the island to “contain” China.
Communist Party of China General Secretary Xi Jinping has said, “The people on both sides of the Taiwan Strait are one family. No one can sever our family bonds, and no one can stop the historical trend of national reunification.” The CPC has also made it clear that separatism will not be allowed to flourish, and the current situation cannot continue forever. Biden said the U.S. would intervene militarily to block reunification, and Trump says socialist China is afraid of him. So, we will see – it is a safe bet that what Xi Jinping says is right – if reunification is “inevitable.”
Trump, trade and tariffs
Countries that enact tariffs generally do so as a means to protect internal markets for industrial development. Monopoly capitalist powers in decline, like this U.S., have a bias towards tariffs as they shield internal markets and out of date industries from competition. For example, China has developed a steel industry that much more advanced than that in the U.S. – hence lots of tariffs for China’s steel and steel products.
The Biden administration kept many of the China tariffs from the first Trump administration and upped some – like those on electric vehicles and aluminum. Now Trump who bills himself as “tariff man” has vowed to take things to another level – at times talking about 60% tariffs on some Chinese goods, or 25% tariffs, and most recently 10% China tariffs starting February 1. We will see.
One impact of tariffs will be an upward pressure on prices in the U.S. at a time when many of us are tired of inflation. Also, tariffs will not result in a huge number of manufacturing jobs, because of the advances in automation technologies.
There is also a political/military dimension to the aspiration to “delink” the two economies and “protect” supply chains
It’s worth noting that the high tariffs were one of the factors that deepened the Great Depression of the 1930s.
Looking to the future
Current U.S. strategy towards China has several elements, including a massive military buildup – things like more naval spending, more troops and missiles in the Philippines, and Pentagon programs like the Pacific Deterrence Initiative. There is no reason to think the Trump administration will pull back on this or change direction.
U.S. strategy also includes drawing countries of the Pacific region into hostile alliances, formal or informal, against China. Trump may find that more difficult, largely because a U.S. under Trump cannot be counted on to honor its commitments – even to its lackeys.
On the balance, it can be said that the U.S. is on the road to greater conflict with China and the possibility of the U.S. provoking a major military conflict can not be ruled out – in fact it would be a likely consequence of where things are heading now.
Progressives, revolutionaries and those of us in the anti-war movement need to stand with China. China has done nothing wrong – it is developing socialism and working for peace. And not surprisingly, China has friends all over the world, including right here in the United States.
We are going to be busy over the next four years. We have an enemy in the White House that will wage an unrelenting war on people at home and abroad, it is our job to make sure that war is not a one sided one.
