US-Trump versus the rising Global South. Behind Trump’s wishful thinking on ‘reindustrialisation’: Why China can do it and the US can’t

Trump versus the rising Global South

We are pleased to republish the below article by Dr. Kate Hudson, Vice-President of the Campaign for Nuclear Disarmament (CND), which is the gist of her speech given at the ‘Socialism or Barbarism’ Arise Festival Day School, held in London on March 29.

Setting out the need for solidarity with the Global South in the face of US President Donald Trump’s international agenda, Kate points out that US foreign policy goal for the last thirty odd years [that is since the collapse of the Soviet Union] has been to maintain its position of sole superpower status. This means ensuring that no other state should accumulate enough economic and strategic weight to rival it – or to create a new multipolarity that acts against US interests. In the current context, this means the rise of China and the Global South, of which it is part. This trend has been recognised since at least the 1990s, as the success of China’s economic reforms became apparent.

Kate explains that Obama’s ‘pivot to Asia’ was the first really serious attempt to address this, but US policy in this regard does not have merely a military component but also a major economic one. However, the figures are not in the US’s favour:

“In 1993, the G7 countries accounted for 45.4% of the global economy. The most significant economies of the Global South, or BRICS (Brazil, Russia, India, China, and South Africa), made up only 16.7%. Thirty years later, BRICS accounted for 31.5% of the global economy, surpassing the G7 on 30.3%. In August 2023, BRICS added five more countries, adding an extra 4% to BRICS’s share of world GDP.”

Referring to China’s lead in electric vehicles (EVs), Kate notes: “The Financial Times commented on this recently, with the headline ‘Trump’s auto tariffs help Chinese EVs to race ahead’, describing the Chinese sector as the centre of innovation, years ahead of western rivals. Interestingly they say that ‘Beijing’s state-led industrial policy has built a formidable manufacturing base.’ High praise from the FT!”

Meanwhile, south-south trade is increasing. China is Africa’s largest trading partner and creditor; 20% of the continent’s exports go to China, and 16% of its imports come from China.

She concludes: “Through increased political and economic coordination, the Global South will continue to rise: Trump’s policies will not be able to reverse that situation. The danger is the damage he will do on the way, whether politically, economically, or militarily…  Our solidarity, our work for peace, is crucial, and we must do everything we can to build links with organisations in and from the Global South. And we must pursue our own campaigning which rejects the right-wing narrative about global threats, whether they come from Trump or Starmer.”

The article was originally published by Labour Outlook.

The US foreign policy goal for the last thirty odd years has been to maintain its position of sole superpower status. This means ensuring that no other state should accumulate enough economic and strategic weight to rival it – or to create a new multipolarity that acts against US interests. In the current context, this means the rise of China and the Global South, of which it is part.

This trend has been recognised since at least the 1990s, as the success of China’s economic reforms became apparent. 

Obama’s pivot to Asia was the first really serious attempt to address this, and it clearly had military elements – switching the US submarine force from the Atlantic to the Pacific, for example. Since then, the military orientation has increased, including numerous bilateral cooperation agreements in the East Asian region, the AUKUS pact with Australia, pushing Australia from its pretty positive relationship with China, into the US military and political framework.

But although the US has overwhelming military dominance – as we know from the Vietnam war, it doesn’t mean they would win any conflict, and its recent track record is pretty much all failure. Currently the most interesting and important developments are in the economic sphere, and as far as Trump is concerned, that is the terrain on which he is primarily trying to intervene, with China and the wider Global South.

So first of all, we can see that the figures are against him.

In 1993, the G7 countries accounted for 45.4% of the global economy. The most significant economies of the Global South, or BRICS (Brazil, Russia, India, China, and South Africa), made up only 16.7%. Thirty years later, BRICS accounted for 31.5% of the global economy, surpassing the G7 on 30.3%. In August 2023, BRICS added five more countries, adding an extra 4% to BRICS’s share of world GDP.

So that was the big trend wake up call. One of the crucial factors in this change is the nature of the productive base. Traditionally the Global South, including China, was seen as a source of poor quality consumer goods, textiles, clothes and shoes being examples, but that has changed. The Global South is now home to the majority share of industrial production. Indeed the Global South is capturing significant market share in the high technology sector and this looks set to continue. 

Trump is trying to push back against this, notably through his tariffs. One example is the auto industry. His planned 25 per cent tariffs on imported cars and key auto parts are meant to force manufacturers to relocate production to the US and create jobs. But US costs will rise, reducing sales, and so US carmakers’ shares have dropped. It looks like his plan is backfiring. The Financial Times commented on this recently, with the headline Trump’s auto tariffs help Chinese EVs to race ahead, describing the Chinese sector as the centre of innovation, years ahead of western rivals. Interestingly they say that “Beijing’s state-led industrial policy has built a formidable manufacturing base.” High praise from the FT!

Recently the Guardian reported on the Bao economic Forum in China, noting that China wants to protect against the volatility of Trump’s tariffs, and now has more than a dozen free trade agreements with Global South countries. One of the Indian participants pointed out, “The US is never on the side of the Global South,” saying that countries like India should look “within the Global South” for economic support. Indeed the Indian government is said to be in discussions about relaxing restrictions on Chinese trade and investment, which were put in place five years ago after clashes at their common border.

There is no doubt that south-south trade is increasing. China is Africa’s largest trading partner and creditor; 20% of the continent’s exports go to China, and 16% of its imports come from China. China’s foreign direct investment engages strategically with the development of the region, with a portion going towards transportation, mining, energy and infrastructure. But this isn’t just a development triggered by the Trump era. It has been under way particularly since the global financial crisis, with the creation of a more integrated and mutually dependent world south of the equator and east of the Atlantic. In fact Trump’s initiatives to brutally reassert the US economically are actually damaging the US economy. 

But while Trump cannot roll back the economic reality, his policies will cause significant hardship and suffering. For example, the impacts of tariffs on other northern countries will damage Global South economies where they have component inputs into northern production. 

And the sheer racism of the Trump administration is destroying the lives and livelihoods of millions of migrants, from Latin America and elsewhere. He backs the genocide in Gaza, pushing ethnic cleansing, treating Palestinian lands as a real-estate opportunity. He’s heading for war with Iran. His disgraceful treatment of South Africa, on the basis of supposed racial discrimination against white South Africans, is just absurd. Yet South Africa is a global political leader: its support for Gaza and its legal challenge has been inspirational.

Through increased political and economic coordination, the Global South will continue to rise: Trump’s policies will not be able to reverse that situation. The danger is the damage he will do on the way, whether politically, economically, or militarily. 

That’s where we have to do what we can, on the right side of history. Our solidarity, our work for peace, is crucial, and we must do everything we can to build links with organisations in and from the Global South. And we must pursue our own campaigning which rejects the right-wing narrative about global threats, whether they come from Trump or Starmer.

Trump versus the rising Global South - Friends of Socialist China

Behind Trump’s wishful thinking on ‘reindustrialisation’: Why China can do it and the US can’t

We are pleased to republish the following article by Sara Flounders, analysing the Trump administration’s proposed strategy to reindustrialise the US. Sara notes that Trump is not the first president to talk about the need for reindustrialisation; “Reindustrialisation was a huge promise of the Jimmy Carter and Ronald Reagan administrations in the 1970s and 1980s… Trump promised this eight years ago during his first term and former President Joe Biden promised a vast program to ‘Build Back Better’ and reindustrialise the US economy and modernise infrastructure.”

Action has never lived up to rhetoric, and US manufacturing continues its protracted decline. Trump’s tactic is to essentially pin the blame on China, imposing tariffs as a means of reordering the international economic system and forcing manufacturing to return to the US. “This is wishful or magical thinking”, writes Sara.

“The US, as a capitalist country, really can’t and won’t reindustrialise, because that is a fabulously expensive process involving many years of investment of the capitalists’ own money… Corporate CEOs know they will only survive by maximising profits and guaranteeing hefty returns every quarter. Any attempt to reindustrialise requires a rethinking of, and massive investments in, infrastructure and education needed for such an economy. This takes decades of investments.”

In reality, domestic investment in the US is directed to where private companies can make a quick buck: the military-industrial complex. “Investment money gravitates relentlessly to the highest guaranteed profits, and that is usually the military budget with its huge, guaranteed, multibillion-dollar annual subsidy”. Hence Donald Trump’s record-breaking trillion-dollar Pentagon budget.

China, by contrast, “has a socially planned economy where the greatest sources of wealth in society are owned by the whole nation”. As such, economic strategy and investment policy are controlled by the people, led by the Communist Party. Socialist economic policies and reorganisation of society “have ended dire poverty for 800 million people and transformed one of the poorest countries on the planet into today’s modern marvel”.

Sara concludes:

The interests of workers and oppressed people in the US are bound up with the development of the people of the whole world. Only through increased cooperation and solidarity will our class here develop the ability to solve the enormous global problems.The ability to rationally plan and invest socially created wealth into rapidly improving technology and infrastructure is decisive. This requires socialism.

This article first appeared on Workers World.

In the 1950s, when Japan and much of Europe was in ruins, the U.S. accounted for 50% of the world’s global production. By the 1960s, this was 35%, declining to 25% by the 1980s. By 2025, the U.S. share of global production had fallen to 12% as production grew elsewhere. (itif.org, Feb. 18)

The capitalist class in the U.S. has grown frantic about this reversal. Its focus is on China, and it blames China for its spectacular level of modern industrial development. In advanced technology manufacturing the future is clear: China holds 45% of the global share to 11% for the U.S. 

Higher levels of production need a high-tech infrastructure to move what is produced to global markets. China dominates the global commercial shipbuilding market, producing over 50% of the world’s new ship orders, while the U.S. share has dwindled to less than 1%. China’s shipbuilding industry is backed by a vast industrial base with government support, allowing it to compete on a larger scale than the U.S. 

China’s high-speed railroads connect 500 cities and reach through Central Asia into Europe. Meanwhile in the U.S., freight and passenger railroads are in decline. 

Can this precipitous decline of U.S. capitalist hegemony be stopped? Can it be reversed? President Donald Trump would have us believe so, but evidence points to a negative answer. The corporate media presents the competition between the U.S. and China as a contention between two nation states, falsely accusing the Chinese government of not playing fair. In reality, China’s advantage arises from the sharp difference in two wholly different forms of organizing society. 

Fears of global financial collapse haunt capitalists

The head of the world’s largest hedge fund, billionaire investor Ray Dalio of Bridgewater Associates, recently warned of a global financial system collapse. Trump’s aggressive and erratic tariff policies and ballooning debt could trigger a breakdown of the global financial system. “I’m worried about something worse than a recession if this isn’t handled well,” Dalio said on Meet the Press on April 13.

Dalio said the world is at a critical juncture, marked by profound changes in the political, economic and geopolitical order — factors which have historically led to severe crises. The only way, according to Dalio, to get through this crisis for the whole system is to lower the deficit from 7% to 3%. Dalio did not mention lowering the military budget or taxing the billionaires. Thus, he is justifying an all-out attack on the working class.

False promises of reindustrialization

Several past U.S. presidents have promised, as Trump has promised, to reindustrialize the U.S. economy and bring millions of productive manufacturing jobs back to the U.S. Trump promised this eight years ago during his first term and former President Joe Biden promised a vast program to “Build Back Better” and reindustrialize the U.S. economy and modernize infrastructure. 

Both Trump and Biden promised job growth. Neither effort moved past the proclamation stage.

The national urgency to reindustrialize and modernize U.S. industry was a source of anxiety and debate in ruling circles long before the balance of trade with China was a factor. 

Reindustrialization was a huge promise of the Jimmy Carter and Ronald Reagan administrations in the 1970s and 1980s. At that time, reindustrialization was a precursor to the so-called “high tech revolution.” It was the first stage of a massive capitalist restructuring that killed untold numbers of good-paying jobs by replacing human beings with robots and automation. 

Real wages, adjusted for inflation, have barely budged for most workers and have fallen for the lowest–paid workers since the assault in the 1970s. The pitch in the 1980s — that the increased need for a highly skilled technological workforce would balance out the drop in manufacturing jobs — never materialized. Thanks to technology, the astronomical rise in worker productivity has led to enormous profits but no increase in real wages.

Trump’s magical thinking

On April 2, Trump’s announced tariffs on 150 countries, proclaimed as “Liberation Day,” would purportedly reorder the international economic system and force manufacturing to return to the U.S. This is wishful or magical thinking. It ignores the most basic law of capitalist investment. 

As Karl Marx explained 175 years ago in his classic work, “The Communist Manifesto,” the bourgeoisie, i.e. the capitalist class, chases all over the globe for the highest rate of profit, the quickest returns, the cheapest labor. The owning class has no sentimental loyalty to any country, only to securing markets and profits. The productive forces are constantly being revolutionized, modernized and made more ruthlessly efficient.

The tumbling stock market forced Donald Trump to quickly “pause” global tariffs for 90 days, because they so severely impacted U.S. billionaires operating in a global market. 

Trump then further raised tariffs on goods imported from China, as China in response imposed higher tariffs on U.S. imports. U.S. tariffs on Chinese imports ballooned to 145% on some products, up to 245% on others. 

Again, certain U.S. billionaires forced Trump to reverse course. Apple and Nvidia scored major victories with Trump’s decision to exempt many popular consumer electronics imported from China. These include iPhones, iPads, Macs, Apple Watches and AirTags, other smartphones, computers and consumer electronics.

In another reversal, Washington had originally placed fees as high as $1.5 million per port call on all Chinese-built ships. But that order was quietly dropped after a stormy public hearing in which U.S. officials faced a chorus of objections from shipping executives. 

The latest executive order — titled Restoring America’s Maritime Dominance — puts forth a grand program but with no amount of grand money to carry it out, except for funding aircraft carriers and destroyers. The order contains no plans for ports or freight carriers.

Military budget – a drain on the economy

As they have done for decades, at each step to boost their bottom line, U.S. capitalists chose the easiest, most immediately profitable path. Investment money gravitates relentlessly to the highest guaranteed profits, and that is usually the military budget with its huge, guaranteed, multibillion-dollar annual subsidy.

In a further effort to halt a free fall in the stock markets, Trump announced the largest military budget in history. “Nobody’s seen anything like it,” he bragged, describing a Pentagon budget that would exceed $1 trillion. This means that the U.S. strategy is still to impose its military domination at the expense of funds for industrial development and infrastructure.

This quick fix won’t solve the problem of building new industries with new jobs, but it throws a bone to the giant military industries. 

Federal funding has been pumped into the military for over two generations, to where it now dominates the U.S. economy. This funding provides a huge subsidy and a guaranteed source of profits to the military-industrial complex. But what was a quick fix has become a drag on the economy. 

In the same way a drug can initially provide a stimulant and boost energy, with time military spending becomes an addiction that hollows out the rest of society. It adds nothing of real value to the economy and weakens the civilian infrastructure by draining it of resources needed for vital social programs, including those that educate its workforce.

Partly due to 75 years of endless military expenditures, the U.S. economy is in an irretrievable downward spiral. More threats, more sanctions and more tariffs will lead to further deterioration of a declining U.S. economy.

Tariffs are a tax

U.S. tariffs are not paid by the businesses that export to the U.S. Tariffs are paid to the U.S. government by the U.S. corporations that ordered the goods. Most often the cost is passed on to the consumer. It’s true that, with the mega-billions in profits the wealthy have reaped from stolen workers’ labor, the wealthy could afford to eat at least a portion of the cost of tariffs. But they won’t! So tariffs are paid by working people in the U.S. in the form of higher prices.

Despite Trump’s hype, tariffs will not reindustrialize the U.S. economy in a way that brings back any significant number of manufacturing jobs. They won’t reverse the U.S. economy’s increasingly slow growth, long-term decline and the loss of U.S. competitiveness in global markets. Creating a wall of protection to stop the flow of imported goods into the U.S. won’t build new factories here.

In a similar way, U.S. sanctions are a failed form of economic warfare against more than 40 developing and formerly colonized countries comprising one-third of the world’s population. Economic strangulation, the policy of intentionally blocking all trade, credits and loans, creating artificial famines, shortages, hyperinflation, even depriving essential medicines, has had disastrous results. 

The tax on millions of imported products will backfire on a deteriorating U.S. economy and harm working people. It is already fueling inflation, eroding international relations, creating a trade war and destabilizing the global economy.

The system is to blame

By moving production overseas for the past four decades, U.S. corporations ruthlessly deindustrialized the U.S. economy under the rallying cry of “free trade.” Their goal was to maximize profits by paying lower wages to overseas workers. Millions of U.S. workers lost jobs, homes, futures and pensions as a result, while overseas workers were superexploited. The average wage of a Mexican autoworker is around $5 an hour; in India it’s about half that amount, compared to a top rate of over $30 an hour for a unionized autoworker in the U.S.

What was called reindustrialization was really deindustrialization. Deindustrialization meant the loss of heavy industry: auto, steel, ship building, railroads and ports. It meant closing factories that produced basic appliances, from washing machines to air conditioners. Every imaginable industry from canneries and food processing to the garment industry moved their highest tech production lines to low-wage countries.

In the 1960s, some 95% of garments worn in the U.S were made domestically. This garment industry has all but disappeared. This loss was part of a broader erosion of the U.S. manufacturing base in which more than 70,000 factories were permanently closed.

Blaming workers in other countries for a process initiated by U.S. capitalists means deliberately opening a totally unwarranted and racist attack. 

The U.S. stands as a dominant force in global outsourcing. Approximately 300,000 jobs are outsourced annually. The economic implications are substantial, as the U.S. market alone generates $62 billion of the $92.5 billion in globally outsourced products and services. (Forbes, Oct. 15, 2024)

Many U.S. tariffs target countries that have been U.S. allies. Destabilizing the economies of other countries is a shortsighted and desperate act. But it will still not strengthen the U.S. economy.

Why can’t U.S. capitalists save their own economy?

The U.S., as a capitalist country, really can’t and won’t reindustrialize, because that is a fabulously expensive process involving many years of investment of the capitalists’ own money.

In U.S. corporate law and policy, “shareholder primacy” ordains that it’s a corporate board’s exclusive fiduciary duty to maximize shareholder value — that is, to boost the price of stock and the goodies distributed to shareholders. Implicitly, this means that corporations do not have binding obligations to pursue the good of their workers or the public as a whole. 

Corporate CEOs know they will only survive by maximizing profits and guaranteeing hefty returns every quarter. Any attempt to reindustrialize requires a rethinking of, and massive investments in, infrastructure and education needed for such an economy. This takes decades of investments.

Why can China plan while the U.S. can’t?

In sharp contrast to the narrow U.S. view, China plays a worldwide role through international initiatives. This includes a key role in BRICS+, an intergovernmental trade organization with 11 member countries and nine partners; the Shanghai Cooperation Organization, with 10 members; and especially China’s Belt and Road Initiative with 140 members. 

These trade and development organizations foster greater economic and geopolitical integration, a sharing of technology and coordination for emerging economies.

China has a socially planned economy where the greatest sources of wealth in society are owned by the whole nation. Banking, communication, freight, raw materials, electric power, railroads, ports, etc., are State Owned Enterprises (SOEs). 

There are big capitalists in China, but the largest share of the Chinese economy is state-run. 

The Chinese Communist Party, with 90 million members, controls this development process. It is rooted in a revolutionary overturn of the corrupt, old feudal society and ending imperialist occupation in 1949. Its economic policies and reorganization of society have ended dire poverty for 800 million people and transformed one of the poorest countries on the planet into today’s modern marvel.

A significant portion of China’s free higher education starts with an emphasis on STEM education — science, technology, engineering and math. Each year the country produces some 3.5 million STEM graduates. This is approximately 10 times as many as those from U.S. educational institutions. In the U.S., 54% of adults read at below sixth grade levels. (Reddit, October 2023)

High levels of skill and advanced education are essential for intervention in today’s world.

Capitalism: an impediment to social progress

Ruthlessly lowering wages, cutting social benefits, infrastructure investments and education is the short-sighted billionaire strategy.

The private ownership of the means of production, the expropriation of all socially produced wealth by a handful of billionaires can mean fabulous wealth for a few, in the short term. However, it is an actual impediment to the ability to modernize industry in today’s global supply chains. U.S. imperialism is incapable of modernizing into today’s global economy, because it is totally chained to an outmoded form of production — capitalism. 

U.S. imperialism can threaten to destroy its opponents to impose its demands. This is a powerful threat. But the capitalists will discover that military might not backed up by industrial capacity becomes a paper tiger, growling without substance.

The interests of workers and oppressed people in the U.S. are bound up with the development of the people of the whole world. Only through increased cooperation and solidarity will our class here develop the ability to solve the enormous global problems.

The ability to rationally plan and invest socially created wealth into rapidly improving technology and infrastructure is decisive. This requires socialism.

Behind Trump’s wishful thinking on ‘reindustrialisation’: Why China can do it and the US can’t - Friends of Socialist China