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This is a low confidence guess, but I think it will initiate another inflationary period after a surge in profits from rents for American companies, especially if Trump can pressure the federal reserve into lowering interest rates (enabling Americans to borrow to cover rising costs), unless I am underestimating how much money the government will raise from the tariffs. The stock market looks like it's going to drop tomorrow but it is not going to be clear whether those losses will stick until it's long over. It is always possible for it to revert to its previous level about as quickly as it left. And that's usually what happens. But if the market continues dropping, that will reflect a major decrease in investment and Trump really is the next Grover Cleveland (non consecutive terms and the second one was an economic depression).

I already wrote in the news mega that the situation is completely unpredictable lol.

It really depends on how seriously you take Trump’s unrealistic words, and whether the bourgeois ruling class has plans of their own with Trump’s policies.

Since we can’t read their minds, we can only entertain the question here with some educated guesses:

First, we need to ask: what is the principal contradiction facing the US empire today?

It is the irreconcilable opposition between industrial and finance capital. Wall Street needs dollar hegemony to rule the world, while the dollar hegemony also led to the long term deindustrialization of the US itself, the stagnation and loss of real wage increase, the transformation of proletarian working class into indebted consumers with increasing burden of mortgage, healthcare and consumer debts that are unlikely to be repaid without wage increase.

This inevitably led to the rise of the grassroots Bernie Sanders movement, and in parallel, Trump’s MAGA movement, that sought to challenge the neoliberal status quo represented by the establishment factions of their respective parties.

So, to reduce the friction with the working class, the US cannot continue to run a persistent trade deficit, but fixing this with re-industrialization would also oppose the interests of the Wall Street finance capital and challenge the global hegemony of the dollar itself.

How can such a contradiction be resolved? Well, resolved is maybe unlikely at a fundamental level, but there are ways to delay and even shift the contradiction elsewhere, and that pertains to how the US chooses to export its dollars overseas.

Since the end of Bretton Woods in 1971, the US has been running a permanent trade deficit to export its dollars to other countries. How do you retain dollar hegemony while reducing trade deficit? You would have to shift the dollar export from trade deficit into foreign direct investments - this allows the dollar to continue to be exported, while reducing trade deficit will allow some limited form of re-industrialization - at least adequate to keep the working class from erupting in mass anger.

But many countries have capital controls precisely to prevent foreign capital from flooding their countries, with some countries like China and India having long-term capital control in place.

Back in 2018, Trump started the unexpected trade war with China by sanctioning Chinese telecommunication companies and with tariffs. But nobody maybe other than Trump believes that imposing such tariffs can lead to the re-industrialization of America.

Instead, it was likely to probe China’s red line, see how much they would tolerate, and how they would react under such restrictions.

Enter Biden 2021-2024: a few things changed the global situation dramatically apart from Covid.

First, the Ukraine war has decimated European economy growth, such that they can take up the role a major consumer in the event of a trade war with China.

Second, the inflation in the US led to the Fed hiking rates (fastest since Volcker shock) that rapidly drew international capital away from the rest of the world back to the US. As a result, countries in the Global South began to run into dollar liquidity crisis and rising interest payments.

Third, the huge volume of US treasuries began to mature starting in 2023, pumping out nearly $1 trillion dollars in interest payment alone a year - most of this fresh money creation went into the stocks and bonds, which is why you see S&P500 doubling in spite of an inflationary environment. Now, these money needs to get somewhere, and foreign sector would be the next target.

All these three conditions have created an opening for countries to open up their capital controls in order to receive dollars to save their economy. In fact, China has been doing so since the September 24 policy following the Fed lowering its interest rate for the first time in two years.

Finally, Trump’s imposition of tariffs on the entire world can only lead to a plummeting of US consumption due to an anticipation of inflation, and threatens to wipe out the export industries in the Global South (Europe and Japan no longer have the capacity to consume, while China still wants to run a huge trade surplus and is in a consumption slump itself so unlikely to absorb the loss of demands from US consumers).

The end result? The US goes into recession (if Trump/Musk does the budget cuts), IMF bailouts and privatization of the assets in the Global South whose economies could not sustain such an economic shock, and as such Wall Street not only gets to export dollars to the rest of the world, at the same time the US can also reduce its trade deficits. This will complete the transition of exporting dollar capital from running permanent trade deficit into foreign direct investment becoming a major channel of how dollar flows to the rest of the world.

Is this a permanently viable strategy? Unlikely, as it also comes with its own contradictions, but finance capital, like a parasite, simply needs to jump from a dying host to a new host to delay its own demise.

Decrease in living standards in the US.

My gut says the American bourgeoisie aren't so blind to push policy against their own interests so the Trump admin will walk back the tariffs a week from now. Or the capitalists will be exempt or work around it.

Like auto manufacturers in America import nearly everything from Mexico. They might just do something like get the Mexican factories to ship to Guatemala first, then to America. Does that have historical precedent? Like bouncing around where shipments come from to get around tariffs

There's a very real possibility that Trump gets too much pushback and immediately ends this, just like he did with the whole birthright citizenship or funding freeze things.

I wont be able to upgrade my pc

Look at Argentina

Too soon to tell. Also not sure what their plan is and what success means there.

It's quite possible they intend to do the whole small yard, high fence thing they've been pushing with Democrats for a long time but really kick it into gear. This has the benefit of crashing quality of life and increasing expenses for the working class which increases their desperation and the potential for exploitation of enlarged underclasses of people who've slipped under from all of this and are only barely not drowning.

It would also involve (attempting) reshoring from China, beating corporations until they comply like with Russia, allowing a few carve-outs (as with Russia), then stoking a war over Taiwan, using the resulting propaganda storm to force heavy sanctions and decoupling (with again some carve-outs for valuable corporations that can't or refuse to pull out right away). That plus the rising reaction in the US and Europe bodes ill for those in the imperial core. What they do next in such a scenario is up for debate. I personally think naked resource grabs like what Trump talks about, just taking Greenland, openly invading/couping nations in Africa and Latin America, completely dropping the mask and seizing as much as they can to pull into their "small yard" behind their high fence and put up as much of a wall around China/Russia and as much of a squeeze on the two of them as they can by using what power they can to deny them as many markets as possible and to maximally disrupt their supply chains (Trump's talk of taking the Panama canal for instance would be potentially part of the US shoring up its naval control of the world, it has only sea-power not land-power potential so must maximize control of choke-points to dominate and enforce embargoes and sanctions). They'd try to combine this with continued operations to foster terrorism and instability in key regions to block the belt and road as well as resource extraction for China's manufacturing.

It's also possible they do something else.

So I think it's possible it's an attempt to use the power of their hegemony before it slips further to shape and direct the world into a shape they believe they can exploit to maintain a dominant position.

Optimistic: Trump and Melon hit a fucking nerve ending, and break the whole thing.

Pessimistic: the tarrif tax plan is a smashing success for US hegemony.

Unfortunately this is still the time of monsters.

Edit: like I'm still thinking about this: https://hexbear.net/comment/5675099

My cynical self says that they go away shortly after bad press and Trump manufacturing a PR win (completely meaningless and non-accountable “Mexico agrees to…” sort of thing) because the investors class seems upset by them.

I know nothing. I am no expert in anything economically. But if I had to hazard a guess, I would say that some very telling things have happened.

• Colombia getting their way with the deportations. Maybe not a full loss for Trump, but still.
• China only getting a 10% tariff, I imagine to try to avoid raising prices too much/keeping China from strongly retaliating.
• The destruction of USAID
• Marco Rubio recently saying the world is now multipolar

Republicans want power internally, and they are willing release most power externally to get it. Fascists want Europe to be Fascist are willing to give up all of the worlds' resources to do it. Trump wants to be a real statesmen guy and add territory to the US and win trade wars to prove it. US Hegemony was already failing, but the infrastructure to replace is isn't there yet. So my best guess is that Trump wins for a year or two, midterm blue wave locks up the country domestically and every nation the US tries to bully has built up the infrastructure with each other/China to start cutting the US out. It will be a long process still, but I imagine the talks are already happening. The US status as the world importer ends both as a consequence of increased domestic manufacturing and other states realizing it's going to happen anyway due to a depression and they might as well plan for it. BRICS figures out a solution to the currency issue (probably not an intentionally permanent one but if it works no one will fix it.) Trump's tower begins to fall, he tries to course correct but it's too late and the the stress kills him. Republicans look at Elon for leadership, but he's too weird to them to be a charismatic fascist leader so they fall back on old style conservatism. California exerts more control over the rest of the country until Newsom is elected president and he actively jettisons the south of the US, then invades them just to bully them.

First things first, if things start going sideways, the admin will be forced to pump brakes on tariffs, or make loopholes. And if the tariffs do go through at their fullest extent, sellers will still find ways around the tariffs to minimize their impacts. Already the Trump admin imposed tariffs on China in 2018, but Chinese exporters just found a whole bunch of loopholes around these tariffs (ex - splitting packages to less than $800 to avoid customs checking).

The impact right away won't be as big or catastrophic as one might think. However, it will certainly accelerate the downfall of American industry over time, as American capital is in a poor position to replace external manufacturing. This is because America doesn't have enough skilled workers (and is being racist to the ones it imports) or government policy to sustain a large manufacturing base. Basically, the productive forces of the imperial heartland will decline, and this will be most notable in agriculture (and industry where prices are already high from bird flu, gas price increases, ecological devastation and so many more factors). Imagine what will happen if the Trump admin successfully turned down the flow of industrial parts for food production from China.

First, a bit of background: AFAIK, the US has been running trade deficits for years - (somebody please correct me if i misunderstood that). Trump is trying to stop that, mostly by just stopping trade altogether. Which, IMHO, is actually kinda sane.

I guess you can only understand the current developments with at least a bit of religiosity/seeing the bigger picture. The influential people in the US are all fundamentalist christians, which means they believe in "the second coming of god", as foretold in the bible. It means, god will come to earth, and transform it permanently. The good guys go to heaven, the bad guys go to hell, or sth.

I guess that they're trying to make that real by developing spaceflight and sending the "good guys" (in their own eyes) to Mars, while not really caring about what happens on Earth, if i understand things correctly.

This is my own view of it, as i have thought about it trying to make sense. I don't know whether it would convince anybody else, though.