By Conor Murray, Socialist Party Ireland. 6 May 2025
What is a tariff?
A tariff is a tax on importing goods from abroad. The tax is paid by the business which imports the goods, however, in order to maintain their profits they will typically pass this cost on to consumers by increasing prices. By making imported goods more expensive, tariffs can function as a type of subsidy to domestic corporations by insulating them from international competition.
Why are Trump’s tariffs so significant?
Many countries already have tariffs, including the US. However, Trump’s have a much bigger scope and scale. On 2 April, Trump announced tariffs of at least 10% against every country on earth, much higher in many cases. This threatened to seriously disrupt global trade and supply chains and sent stock and bond markets into crisis. The reaction of the capitalist markets seems to have forced Trump to make a limited retreat, reducing tariffs on all countries other than China to a still significant 10%, to be reviewed after 90 days. Meanwhile, tariffs on China were raised to a prohibitive 145%, with China reciprocating with its own tariffs. There is now a significant trade war between the US and China, with trade between the world’s two largest economies likely to virtually cease unless there is a climbdown or a deal.
What is the background to these tariffs?
Much of the coverage will focus on Trump’s personality, which is certainly erratic and bizarre. He also has a long record of advocating tariffs. In his first administration, Trump tended to be influenced or hemmed in by more traditional elements of the political establishment, but in his second term, Trump is surrounded by ideological co-thinkers, influenced by nationalist fantasies about returning to America’s past. They harbour hostility even towards US-allied countries, such as those in Europe, and seek to force them into an even more subservient relationship.
However, these tariffs are also a reflection of the struggle for global influence, markets and resources between the US and China, the two main rival imperialist powers in the world today. Tariffs against China began in Trump’s first term but continued under Biden. The US capitalist establishment has been seeking to end its reliance on China, particularly for key strategic industries by moving manufacturing to the US or to ‘’friendly nations”. Trump’s tariffs are massively accelerating this broader process.
What will this mean for working-class people?
The tariffs are bad news for working-class people in the US and worldwide. They will mean even more inflation and possibly even shortages in goods. Workers will face layoffs, cuts in hours and in pay. While the ups and downs of the stock market may seem very removed from our lives, unfortunately, many workers’ pension funds are being gambled on those markets. In the Global South, tariffs could be even more devastating with many poorer countries reliant on exporting commodities or cheap manufactured goods to the US. In Ireland, the state’s reliance on US multinationals to drive growth could be in crisis as global trade contracts, already there are fears for jobs at Intel and other companies could follow.
Can tariffs bring well-paid manufacturing jobs to the US?
Whatever his real motivations, Trump has been publicly promising a return of well-paid manufacturing jobs to the US, where many areas have undoubtedly been devastated by deindustrialisation. It is an empty promise. Developing an industrial base will not just be achieved by tariffs but would require massive investment in infrastructure, skills and training, constructing new factories etc. There is no indication that either US big business or Trump’s administration is willing to do this – they are actually preparing massive austerity and US capitalism has been focused on increasing profits through speculation. Meanwhile, many existing US manufacturers are dependent on importing parts from China and other places.
Nor is it guaranteed that manufacturing jobs would bring security or high wages for workers. While the manufacturing jobs of the post-war period often did, this was a result of strong trade unions, high taxes on the wealthy and other things which Trump vehemently opposes. When Trump talks about bringing manufacturing back to the US, he consistently refers to the 19th century when millions of US workers toiled in factories with low wages, unsafe conditions and virtually no labour rights.
Is returning to ‘Free Trade’ the solution
The era of ‘Free Trade’ (or neoliberal globalisation) from the 1970s onwards was marked by attacks on the working class around the world, including privatisation, deregulation, assaults on unions and public services and a huge growth in inequality. In the Global North, it eliminated the relative economic security that some workers had achieved and replaced it with precarious work, increased indebtedness and housing crises. This model was discredited by the 2008 economic crash and the resulting austerity. In the Global South, much has been made of the alleged benefits of globalisation; however, with the exception of China, industrial development has actually stagnated or gone into reverse and many countries have been simply exploited as sources of commodities for the rich countries.
Free trade and protectionism are just different methods for capitalist governments to pursue the interests of their country’s corporate and big business interests at the expense of workers and the oppressed. While clearly opposing these tariffs, socialists should not be advocates for either model.
How can working-class people respond?
First, working-class people did not create this crisis and must not pay the price for Trump’s tariffs or for any disputes between the different capitalist powers. This means organising to resist pay and job cuts, price rises and austerity. The trade unions in Ireland and internationally should be preparing a serious campaign of resistance, including strikes and workplace occupations where necessary.
Second, this poses the need for an alternative to the current economic model based on multinationals. We need a socialist industrial policy based on public investment and ownership geared to producing the things we need: housing, infrastructure, green energy etc.
Finally, the tariffs are just the latest in the capitalist polycrisis; a system which is delivering oligarchy, far-right authoritarianism, war, genocide and ecological catastrophe. We desperately need an alternative to this chaos – a socialist world where the wealth and resources are in the hands of the vast majority through public ownership and democratic planning, and geared towards fulfilling our needs and genuine international solidarity.