While Kamala Harris tried to peddle good vibes, joy, and optimism in the middle of a crisis, Donald Trump was the only major party candidate to admit that something is wrong with the economy—and that drastic measures are needed. In doing so, he made some of the boldest promises one can imagine:

• “If Kamala wins, you are 3 days away from a 1929-style economic depression. If I win, you are 3 days away from the best jobs, the biggest paychecks, and the brightest economic future the world has ever seen.”

• “Starting on day one, we will defeat inflation quickly and we will make America affordable again. I will cut your energy costs in half. It’s time for the working man and woman to finally catch a break. We are going to bring back the American dream—bigger, better, and stronger than ever before.”

• “We’re going to fix everything about our country.”

• “This will truly be the golden age of America.”

How exactly will he achieve these remarkable feats? Chief among his demagogic solutions is his plan to increase tariffs on foreign imports. The most extreme is a potential 60% tariff hike on Chinese imports, meant to protect the American economy from Chinese competition. Trump’s pragmatic, businessman’s logic says that if Chinese commodities are more expensive to import, companies and consumers in the US will buy products “Made in America” instead.

The idea is that this would lead to historic investment in domestic manufacturing, reforging America’s manufacturing base and “making America great again.” “Our best days are yet to come,” he claims.

Trump says that America was “a smart country” in the 1890s, when it had “all tariffs” and “no income tax.” This sounds nice, but a lot has changed in the last 130 years or so. Since then, the US opened itself to the global market and grown exponentially. Today, capitalism is irreversibly reliant on global trade. Interrupting that flow could push the already tottering world economy on edge.

You can’t have capitalism in one country

Early in their history, the capitalists realized that specialized companies can produce commodities more efficiently and cheaply, allowing for bigger profit margins. They can develop technique and scale up faster. It’s more efficient for a pencil company to buy rubber erasers and aluminum ferrules from other specialized producers and focus exclusively on making pencils, than to produce all the components themselves. Later, in the age of monopolies, the capitalists sought to own or control all aspects of the production process. But the specialization within these conglomerates continued.

As capitalism developed, entire countries specialized in particular industries and traded with others for commodities that their own economies didn’t produce. This international division of labor allowed capitalism to develop the productive forces on an unprecedented scale and created an enormous working class. An increase in trade barriers means throwing sand in the gears of modern capitalism.

In the 1990s, after the collapse of the Soviet Union, the process of globalization got a second wind. The share of global GDP made up by imports and exports increased from 39% in 1990 to 61% in 2008.

In his victory speech, Trump claimed that “China doesn’t have what we have.” But they do. The US and China, although fierce rivals, are tied to each other economically. / Image: Gage Skidmore, Flickr

Capitalist economies have become extremely interdependent, and any interruption to international trade can damage the world economy’s delicate balance. Recall what happened when semiconductor production experienced momentary interruptions from 2020 to 2023. Industries worldwide struggled with the restricted flow of a single commodity. The new tariffs proposed by Trump would interrupt the flows of multiple necessary commodities.

In his victory speech, Trump claimed that “China doesn’t have what we have.” But they do. The US and China, although fierce rivals, are tied to each other economically. For instance, one American company, Apple, produces around 95% of their products in China. A vast number of other American companies have production lines there. Decoupling from China, which is virtually impossible, would mean major disruptions and price increases. In the case of Apple, they would either stay in China and deal with the tariffs, or strategically move some of their production to other countries, lengthening their supply chains.

Even when there is a break in direct trade with China, America still imports their products. When the US put tariffs on China, Chinese commodities came into America through “connector countries” like Mexico and Vietnam. The supply chain is now artificially longer and more expensive, while the attempt to restrict Chinese commodities is basically nullified—leading to tariffs on Mexico as well. You can see where this is headed. Tariffs on tariffs on tariffs.

In addition to the tariff hike on Chinese goods, Trump has proposed, “10 to 20% tariffs on foreign countries that have been ripping us off for years.” If implemented, even these lighter tariffs will be damaging. A third of US imports are raw materials, unfinished components, or means of production for American industry or farming. American companies won’t build up domestic production or stick it to China, as Trump promises. Instead, workers will foot the bill for increased costs of production through higher prices.

Protectionism: An endless screw

When one country moves to protectionism, you can expect a feedback loop of retaliatory measures from competing countries. In the 1930s, the US implemented the Smoot-Hawley tariffs in an attempt to alleviate the effects of the Great Depression—but it exacerbated them. The feedback loop of retaliating tariffs from other countries reduced US imports and exports by 67%. Capitalists are aware of this phenomenon and are concerned about the recent protectionist trend. In the words of the International Monetary Fund, if it continues, “We could see the annihilation of the gains from open trade.”

Engels called protectionism, “An endless screw, and you never know when you have done with it.” In other words, when one national industry is protected, it often damages another national industry, which subsequently has to be protected as a result. This happened during Trump’s first term. General Motors closed down multiple factories and cited his protection of the steel industry as a factor.

Donald Trump might seem like a madman for going down this path. It’s true that these policies contributed to making him the pariah of the establishment. But the ruling class has often reacted to the inherent contradictions of capitalism by taking a hammer to the means of production, sacrificing layers of the small capitalists, and creating conditions for further immiseration of the working class.

No measure can save capitalism from the current crisis. It is a senile system in terminal decline. Internationally, the capacity exists for the production of more commodities than can be sold for a profit on the market, leading to periodic crises of overproduction. The productive forces brought into being by capitalism are constantly constrained by the system’s intrinsic limits—private property and the nation-state. The productive forces are straining to unleash their full power and potential. Only a nationalized planned economy on an international scale can do this. Revolutions to put the working class in the driver’s seat are the first step.