Global stockmarkets plunged in horror after Trump announced his so called “reciprocal tariffs” on virtually every country on Earth.
Billionaire investment bankers in the US began screaming for a reprieve. In response Trump took a step back.
He has put most of his tariffs on hold for 90 days, imposing a tariff of 10 per cent across the board until then. Trump says he wants to make deals in exchange for dropping his proposed tariffs. It’s unclear how much countries will have to offer for him to accept.
Australia’s tariff rate will remain at 10 per cent, alongside 25 per cent tariffs on aluminium and steel. The US, however, is a relatively minor market for Australian exports, and the direct tariffs won’t have a big effect.
But China has been singled out. Trump has ratcheted up China’s tariff rate from an initial 34 per cent to 145 per cent, and it has now retaliated with its own tariffs of 125 per cent on US imports.
It’s now clear China was always Trump’s main target. Trump has also spoken of negotiating with China, predicting, “we’ll end up making a very good deal”. But the Chinese government has already signalled that it won’t give in easily.
It has also sought to take advantage of Trump’s tariffs targeting US allies across Asia including Japan and South Korea as well as those facing savage tariffs rates such as Vietnam, promoting itself as a more reliable partner on trade.
Trump’s tariffs are likely to send the US economy into recession. But they will also damage the Chinese economy if they remain in place.
This could lead to a global economic downturn—and would have a major impact on Australia, since China is the country’s biggest export market. A Chinese slowdown would see them buying fewer Australian goods, threatening jobs here. The same thing applies if Trump reinstates higher tariffs against South Korea and Japan.
The US is showing itself to be a ruthless imperialist power intent only on advancing its own interests and profits. Trump is only making the motives that have always driven US policy more blatant. We need to end AUKUS, scrap the US alliance and fight for a world run in the interests of working class people not the billionaires backing up Trump.
