On Wednesday, President Donald Trump announced that the United States will impose a 10 percent tariff on all imports and additional, much higher rates for specific nations, in what he called “Liberation Day” for U.S. trade policy. 

The universal baseline tariff will begin on April 5 and the added penalties will take effect by April 9. The countries being specifically targeted for being “unfair trade partners” are China (which is being hit with a 34 percent tariff), Japan (24 percent), and the nations included in the European Union (20 percent).

There is increasing fear among sectors of the American ruling class and some think tanks that Trump’s tariffs are fueling geopolitical shifts and further jeopardizing U.S. hegemony. The countries under attack from Trump’s policies are not only threatening retaliatory tariffs and a spate of economic measures that could severely restrict American capital, but are also forging alliances that could potentially form a front against Trump’s trade war. By bullying its allies in Latin America, for example, Trump could strengthen China’s economic influence in the region as they appear as a reasonable and cooperative partner, investing in infrastructure and development projects in the countries and fostering trade. In Asia, the threat of tariffs has led to increased cooperation between China, South Korea, and Japan. The three nations held their first economic talks in five years, announcing their intent to accelerate the negotiations on their trilateral free trade agreement and to implement coordinated tariffs against the United States. 

Trump’s return to the White House has also accelerated the E.U.’s efforts to strengthen their own bloc, by striking new trade deals and attempting to deepen their existing geopolitical ties. Over the last four months, the imperialist bloc has concluded 25 years of on-again-off-again trade talks with MERCOSUR (comprised of Argentina, Brazil, Paraguay, and Uruguay), finalized or upgraded deals with South Africa and Mexico, and has expressed its desire to broker a free trade agreement with India this year. 

While Mexico and Canada were not part of the countries that Trump mentioned as part of his “blacklist,” the recently-implemented 25 percent tariffs on the auto-industry will be seriously damaging to the two countries, especially the United States’s southern neighbor. Mexico’s economy relies heavily on the auto-industry, which expanded under NAFTA as major automakers, finding a new source of cheap labor and increased profits, set up factories and transformed the country into a key supplier of vehicles and parts to the United States and Canada. With auto-manufacturing now accounting for over 4 percent of Mexico’s GDP and employing millions, tariffs and attacks to these supply chains — brokered, above all, by the greed of imperialist capital — are set to severely jeopardize the living conditions of an entire sector of Mexico’s working class. For now it is uncertain if Canada will be exempt from the tariffs on the auto-industry. Regardless, it is not yet clear how the tariffs will ultimately be implemented, given that they violate the rules of the USMCA. 

Soon after the announcement, the stock markets took a massive hit, reflecting fears among sectors of capital that the tariffs will have a strong impact on the United State’s economic growth as well as the world economy. Stock futures took a deep dive, as the Dow Jones Industrial Average lost 1,069 points, or 2.5 percent, while the S&P 500 futures dropped 3.6 percent. The shares of multinational companies like Nike, Amazon, and Apple dropped by over 4 percent. Economists are also concerned that the new tariffs will boost inflation and “further rattle global markets when they reopen Thursday,” according to the Wall Street Journal. 

While markets are and will be punished by the tariffs and some capitalists will suffer some losses from their obscene fortunes (raising multiple questions about the future of the world economy), these tariffs, above all, will have their most egregious effects on the working class and the most vulnerable sectors of society. Despite their “exemptions” for Mexico — a country that is completely subordinated to U.S. imperialism — millions of Mexican jobs are still in jeopardy because of these tariffs, as is the Mexican economy as a whole.  These tariffs, in addition, will only boost inflation, and the consequential rise in prices of daily goods will put a further toll on the conditions of working class families here in the United States.

Trump’s “America First” agenda is towards a United States that exploits the world’s working class as well as its own working class. It is an America for Elon Musk, Jeff Bezos and the corporations. Decades ago, the automotive corporations went to Mexico in search of cheap labor, taking advantage of the lack of rights of Mexican workers to pay them a pittance to maximize their own profits. In order to build their factories in the United States once again — which is not a given — they will fight to impose the same conditions on the working class here to protect their profits. They will demand that Trump block any unionization attempts by these workers and guarantee their profitability, as has been the case in the South in states like Georgia, Tennessee, and Kentucky, where auto-workers are paid less than their counterparts in other states, work in conditions that are far more unsafe due to fewer regulations, and have no rights. 

In the face of these attacks, union leaders like Sean O’Brien and Shawn Fain are siding with Trump on tariffs, pitting the interests of the American working class against that of their class siblings across the world — especially across the southern border. The labor movement must break with its chauvinism to fight for the rights of the immigrant labor force in the United States, against Trump’s tariffs, and for the rights of the Mexican working class; this struggle must build the power of the regional working class against Trump and the corporations that exploit workers on both sides of the border. 

It is uncertain whether and how Trump’s tariffs will go forward. In the coming days, we will see the impact on the markets, the real economy, and geopolitics. It is possible that, in Trump’s fashion, this new wave of tariffs will be used as mechanisms for negotiation. Even so, this drastic turn in U.S. trade policy is undoubtedly a threat to the trade rules that were so dear to neoliberal stability. And as the capitalists scramble for solutions, they gamble with the futures of the working class and oppressed.