By Andy Yorke
After three days of speechifying, executive orders and appointments of the most reactionary cabinet in US history, including giving fat sinecures to many in his own family, Trump turned to address the World Economic Forum at Davos. His rambling speech reprised his programme to the assembled global elite.
Towering over the sober audience on a giant video screen, Trump boasted about his plans for the US while justifying his tariffs and bullying of smaller countries: ‘many, many things have been unfair for many years to the United States’.
This narrative of victimhood is the flipside of Maga’s aggressive racism and chauvinism, as well as its justification. So in his inaugural address he promised that ‘Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens. It will be massive amounts of money pouring into our Treasury coming from foreign sources’. But there are massive obstacles to Trump’s project of remaking America in Maga’s image.
He is in a stronger position now than in 2016 with a firmly Maga-dominated Republican Party and a much better prepared government of hand-picked true believers. Republican majorities in the House and Senate and a Trump-packed Supreme Court give him control of all branches of government and wide latitude to impose his policies.
Global ambitions
Internationally the Gaza War and Israel’s weakening of Hamas, Hezbollah and Iran, with the bonus of the downfall of Russia’s ally Assad, opens the way for a Middle East settlement favourable to the US. This could of course be upset by further aggression of its Zionist guard dog, the courageous resistance of the Palestinian people and a revival of the democratic aspirations of the Arab, Iranian, Kurdish and Turkish ‘streets’.
In Ukraine Trump’s offer of peace or escalated war hasn’t been taken up by Putin yet, but would force this devastated semicolonial people to accept the partition of their country and a peace of ruins, poverty and Western exploitation. Both settlements, brokered through a mix of bribery and bullying, would enable Trump to concentrate on China, a new global imperialist power and the USA’s main rival.
Despite the first Trump administration’s trade war and record tariffs, retained by Biden, China saw its biggest export surplus yet at nearly £1 trillion in 2024. China has become a leader in many tech fields, such as electric vehicles and AI, while its global investments have made it the main trading partner to South America, what the US ruling class considers its ‘backyard’.
The US is engaged in a grand strategy to recover its own economic dynamism and preserve its position as the most powerful imperialist state. China is their growing, primary obstacle on the world stage. For Trump, his policies kill two birds with one stone, rebuilding US domestic industries and more jobs for his base.
The ‘Trump bump’ in the stock markets, sending them to record highs, shows that investors expect profits to leap from turbocharged Republican policies—he boasts unprecedented cuts to government, taxes and regulation. Though there are genuine fears of inflation and tariff wars, exemplified by the quiet rise in the 10-year US bond yield since September, pricing in higher risk.
But as the ‘tech bro’ billionaires’ conversion to Maga show, significant sections of the US capitalist class have shifted behind Trump since 2016, leaving their veneer of liberal concerns and causes behind. As a disrupter willing to upend international relations and trade in pursuit of recovering US power, one with a mass populist movement able to cut the Gordion knot of winning elections with a radically pro-business programme, they are betting that Trump can do what Biden couldn’t.
‘Drill, baby, drill’
Trump praises autoworkers, miners, teamsters and farmers who built America (no mention of slave labour!) and casts himself as a friend of labor with his tariffs, ‘Drill, baby, drill’ energy policy and pulling out of the Paris Climate Accord:
‘With my actions today, we will end the Green New Deal and we will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American autoworkers. In other words, you’ll be able to buy the car of your choice. We will build automobiles in America again at a rate that nobody could have dreamt possible.’
One dramatic convert is Shawn Fain, supposedly ‘left’ leader of the United Autoworkers (UAW) who regularly appeared at Labor Notes conferences brandishing its ‘Troublemakers Handbook’, sporting a T-shirt with the logo Eat the Rich. He endorsed Harris and condemned Trump as someone ‘who stands against everything our union stands for’. Now he has written a Washington Post op-ed, ‘I’m president of the UAW. We’re ready to work with Trump.’
Along with Teamsters leader Sean O’Brien who spoke at the 2024 Republican National Convention, this shows that the ‘left wing’ of the trade union bureaucracy cannot be relied upon to lead any sort of fight against Trump. Indeed the American workers’ movement will remain paralysed as long as it is led by such people, whether they tie it to the likes of Biden and Harris or play bit parts in Trump’s carnival of reaction.
On 21 January, Trump declared war against all forms of ‘woke’, cutting federal funding for schools supposedly teaching ‘critical race theory’, ranting ‘we have an education system that teaches our children to be ashamed of themselves, in many cases to hate our country.’ He has declared a purge of diversity, equity, and inclusion requirements from federal and state institutions, extending the culture war.
This will put teachers, civil servants, local authority workers and their trade unions in the firing line. Trump’s sweeping rollback of transgender rights is part of this, with a ban in the military, barring transgender women from competing in women’s sports and restricting access to gender-affirming care, hitting the estimated 1.6 million transgender Americans.
Plutocracy
These right wing populist measures are intended to intoxicate his plebeian followers and hide not just his pro-rich policies but the fact that his administration is a veritable plutocracy, including 13 billionaires with a net worth above $380 billion—higher than the GDP of 179 countries combined. They are there to serve their class at the expense of the world and the great majority of the US people. The scraps from the table are merely ballast to keep his base, and union leaders, on board.
His plans to ‘make the United States a manufacturing superpower and the world capital of artificial intelligence and crypto’ involve a private sector venture, Stargate, projected to invest $500 billion to fund infrastructure for AI and creating more than 100,000 US jobs. Plans to ‘pursue our manifest destiny into the stars’ and ‘plant the stars and stripes on the planet Mars’ will launch another cold war style space race, an adjunct to the arms race, to gain a lead on China. State subsidies will no doubt help open these new fields to US capital and outpace China and other rivals.
Abroad Trump talks loudly while waving around a big stick: tariffs. He has threatened 25% tariffs on Canada and Mexico, America’s largest trading partners, and a 60% tariff on Chinese imports, though recently this has been reduced to 10%. On The EU he said, ‘We have a $350bn [£283bn] deficit with the European Union. They treat us very, very badly, so they’re going to be in for tariffs.’
Given the US surplus in services to the EU, this is actually a much smaller deficit. There will also be problems for US firms relying heavily on Chinese production; for instance one million Teslas are now made in Shanghai. And Trump’s tariffs generally end up smaller than his rhetoric—his advisors and billionaire backers are well aware of the dangers of a tariff war leading to trade crash and recession.
Commentators noted that despite his claim of ‘day one’ tariffs his pile of executive orders did not include them. Trump will use them to pressure Canada and Mexico into quick concessions, particularly on cars (also an issue with Germany), and force the EU to make similar concessions, including importing more US gas. He also demands allies hike military spending to 5% of GDP, an impossible figure without slashing welfare spending (even the US does not spend this much).
Contradictions
This points to the larger contradictions in Trump’s promises and policies, which are radical but seek to offset the chronic, global overaccumulation of capital by lowering costs for American business: state spending cuts, tax cuts, deregulation but particularly by shifting costs onto other countries, semicolonial subordinates as well as imperialist rivals.
There will be retaliation, possibly leading to trade wars, undermining the capitalist economy further. Trade and production may not be a zero-sum game between imperialist powers but in the post-2008 stagnant economy there is a strong trade-off. If any country could pull off this beggar-your-neighbours policy, it is the gigantic USA, which accounts for nearly a third of the global economy, but there are limits to this.
Trump is committed to slashing Federal spending, deficits and debt ($35tn or 120% of GDP) as well as high spending on defence, big tax cuts and a costly deportation campaign. The relative openness of the American economy to immigration has been crucial to its relative dynamism, while economists argue there isn’t much scope to expand domestic energy production.
Union leaders might think Trump’s immigration and economic policies put a floor under low wages while creating more well-paying jobs. In reality tariffs will lead to retaliation, hitting US business and tendentially undermining growth and jobs. Any extra investment will certainly advantage the anti-union South and Republican-voting states with ‘right to work’ laws, while any serious success with budget-cutting or Musk’s new Department of Government Efficiency (Doge) points to a lot of unemployed, this time of white collar workers.
Crucially, tariffs (and in truth mass deportations too) will hike prices for Trump’s plebeian base. Federal Reserve central bankers will have to hike interest rates, further hitting growth, jobs, and homeowners.
Given how inflation hit Biden’s vote, this is a real threat to Trump’s popular support. If Trump’s populism crashes, his only way out would be to push them further right, towards fascism. Democrats could hardly counter this with a Roosevelt-style New Deal, but this offers no advantage for big US capital today.
The real answer is militant class struggle and an internationalism that rejects blaming immigrants or workers in Mexico or China for low wages or closed factories . We cannot rely on union leaders or reformists, from Sanders to the DSA, who dare not break with the billionaire Democrats. We need to build a revolutionary working class party that can win its spurs in the future battles against Trump.
