It seems that the US instigation of a trade war has begun to stir some serious retaliation. As the US under President Trump continues to chart a course of economic and military confrontation with the entire planet, some countries have begun trying to deal with US tariffs. China seems to be leading the way in that arena.
As China continues to be frustrated by the knee-jerk economic policies of Trump, they’ve begun looking for ways to deal with the tariffs – in ways that might cause increasing harm to the US. The US petrodollar is a cornerstone of the US economy. Both the dollar domination and energy sector are key aspects of US hegemony throughout the world.
In retaliation for the continuing tariffs, China has decided to target that very sector of the economy. They’re reportedly planning to impose tariffs on US crude imports. instead, they’ll be seeking an oil supply from Africa and the Middle East, particularly Iran. With oil being such an important aspect of the US economy, it is bound to hurt.
A massive refinery in China by the name of Dongming Petrochemical has already halted crude purchases from the US. Their primary imports are now coming from Iran. This is significant as the US is currently threatening to ban Iranian oil from the global market as they continue to place pressure on the country. Since the illegal and unilateral US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) the US has been set upon sabotaging the Iranian economy. This latest step by the US shows the vicious and dishonourable nature of US imperialist politics. China has made it clear that they refuse to follow US demands to ban business with the Islamic Republic.
This is certainly a significant move. China is currently the second largest purchaser of US crude-oil. It is estimated that China imports 400,000 barrels of it a day.
Meanwhile, China has begun opening up talks with the European Union discussing a possible lifting of tariffs between the two. The EU recognizes the effects the US tariffs are having on the Chinese export economy. No doubt they’re looking to fill the dropping demand. The same is true vice-versa. Discussions are being made to remove restrictions on foreign investment. They need to increase business with each other to makeup for losses by the US.
So what does this potentially mean? It means when the US finally gives up its trade war, they may find themselves without anyone to do business with – because those potential deals have already been made with others.
But there’s more…
The US is about to learn a hard lesson in Marxist economics. It’s the common view that US capitalists sent manufacturing overseas simply because they wanted a higher rate of return. Reduced production costs have meant higher rates of profit. This is significant as the rate of profit in the capitalist world tends to decline over time. In each period where it has reached a crisis point, a new policy has been implemented. Neoliberalism, union busting, imperialist expansion, NAFTA Agreement, the opening up of China etc.
Trump, and others of his economic ilk, truly believe that they’ll stimulate domestic production of certain finished goods. This may be the case, but their rates of profit will be much lower. In time, this will tend towards crisis.
There is no way out of the contradictions of capitalism: capital does what it NEEDS to do, not want you WANT it to do.