Planlessness (2026)

Book Review from the January 2026 issue of the Socialist Standard

The Economic Consequences of Mr Trump: What the Trade War Means for the World. By Philip Coggan. Profile £7.99.

A first reaction to this book is that it was likely to be out of date by the time it was published. Given Trump’s tendency to change his mind, anything said would probably no longer apply after a month or two. The author does indeed record Trump’s decisions about tariffs and his repeated revisions of them, describing him as ‘a man without a plan’ who based the calculation of tariff rates on an absurd formula. But he also notes some ideas that underlie Trump’s policies.

The main reason seems to be the intention to return manufacturing industries (and jobs) to the US, but this is unlikely to be successful. In 2013, as an illustration, Motorola opened a smartphone factory in Texas, but it closed after a year because of high costs. Even when it does pay off, building new factories takes time and the US has a shortage of factory workers; they might come from abroad, but of course Trump is clamping down on immigration. The US will simply not re-enter ‘a golden age of manufacturing employment’.

On the whole Coggan adopts an orthodox economic perspective, arguing, for example, that tariffs interfere with market signals about the causes of rising and falling prices. Tariffs have varied over the centuries and protectionism was more widespread between the two world wars. But since the 1960s tariffs have generally been falling, from a global average of 14 percent then to 10.9 per cent in 2000 and 2.5 per cent in 2021. Free trade, he says, is good for an economy, though there has rarely been completely free trade.

One good point he makes is about the interconnectedness of global production, with long and complex supply chains. An iPhone is based on 187 suppliers across twenty-eight countries, while cars imported to the US from Mexico consist largely of components made in the US. Around eighty per cent of the toys sold in US shops are made in China, so the massive tariffs Trump wanted to impose on imports from China were a non-starter, and they have now been scaled back in a major way. American workers are already complaining about higher food prices as a result of the various tariffs, such as bread doubling in price (Guardian 19 October).

The whole world, Coggan suggests at the end of this short volume, ‘will suffer the adverse economic consequences of Mr Trump’. But really these are the consequences of the capitalist system, not the result of the idiosyncrasies of one man.

Paul Bennett

Canada versus Trump (2025)

From the June 2025 issue of the Socialist Standard

From the Socialist Party of Canada’s monthly newsletter.

Canada versus Trump

You are all aware of the declaration of trade war Trump imposed on the rest of the world on April 2. In Canada there was a sigh of relief that it wasn’t as bad as many feared. Nevertheless, he kept the existing 25 percent tariffs on Canadian steel and aluminium and will maintain tariffs on Canadian goods that don’t comply with the North American trade deal that sets rules about limiting foreign content.

Though Canada hasn’t been hit with tariffs as hard as some countries, nevertheless its effects are still felt. A survey conducted by the city of Toronto showed that Toronto businesses are bracing for job cuts and cost increases. Of the 513 businesses that responded, one third said they were implementing hiring freezes, while another third were expecting job cuts. Three quarters were anticipating rising costs, which was the most common concern, while about half are expecting major disruptions to their operations. The city promised to allow companies who can show they’ve suffered because of tariffs, a six-month property tax reprieve.

American companies will not get contracts from the city. Other cities across Ontario are also bracing for the impact; at a conference of city mayors on April 3, they asked the provincial and federal governments for a portion of ‘any stimulus package’, especially for infrastructure funding. Most Canadians are hoping for the federal government, elected on April 28, to be able to deal with the worst aspects of tariffs.

Canada is hitting back at Trump’s tariffs with import taxes as much as 25 percent on vehicles assembled in the U.S. Ford, GM and Stellantis are the automakers with the biggest share of Canadian sales that rely on imports from the U.S. For all three companies a majority of the products they sell in Canada are made in the U.S. Under Canada’s new rules, the amount of tariffs on a vehicle will depend on its components, though Mexican parts are exempt. If a car is assembled in the U.S. with 80 percent U.S. parts and 20 percent Mexican or Canadian components, the 25 percent levy will apply to the U.S. content, resulting in a total tariff rate of 20 percent. One thing about capitalism, life under it gets more complicated every day.

One positive thing about the stupid trade war is the fact that thousands of American physicians want to come to Canada. John Philpott, CEO of CanAm Physician Recruiting Inc., a Canadian company which specializes in bringing international medical personnel to Canada, said since Trump took office there has been a 63 percent increase in registrations from American doctors wanting to work in Canada. Philpott said, ‘My phone’s been ringing off the hook.’ The surge in interest comes as the U.S. faces health care funding cuts, mass layoffs and hiring freezes, including at the Center for Disease Control and Prevention, which has lost 2,400 jobs. Before Trump was elected many Canadian doctors went to the U.S. for more money; Trump quickly and surely changed that. Of course this can only be beneficial to Canada’s shaky health system, but it’s just an improvement within capitalism which we as socialists work to abolish.

We of the SPC as individuals are against Canada becoming the 51st. state, but politically we will not work against Trump’s mad intention. Whether Canada remains Canada or becomes part of the U.S. it still means exploitation of the working class.

Federal election

The Liberals under Mark Carney won 169 seats at the federal election on April 28. This was 3 seats short of the majority they needed; the Progressive Conservatives (PC) winning 144. The leftist New Democratic Party (NDP) won 7, the Bloc Quebecois 22 and the Greens won one. Most people thought it would be a tight race which it was. Both Pierre Poilievre and Jagmeet Singh lost their seats, which must’ve been humiliating. In Poilievre’s case it may well have been his smart-ass personality and his constant personal attacks on his opponents which done-him-in. With Singh, whose party lost 7 seats, it was probably because so many would-be N.D.P. voters voted Liberal, not wanting to split its vote, thinking Carney would do a better job of standing up to Trump than Poilievre, which was the main election issue.

The Toronto Star endorsed the PCs in the election on April 28. Its main points were that Canadians should support a government that is for free enterprise, eliminates barriers such as cutting red tape, restores fiscal discipline, reforms the tax system and develops ‘our’ natural resources and ‘That is why we are supporting Pierre Poilivere and the Conservative Party of Canada’. Since its founding in 1892, the Star’s main mantra has been to this effect, ‘Hey listen up folks, capitalism isn’t the economic piece of junk Marxists would have you think it is. No Siree, it’ll work just fine if you smooth away its rough edges’. You might think that with their crusading and reforming zeal they would support an openly reformist party like the NDP or its predecessor the CCF, but no, they go for a blatantly ‘screw the working class party’.

Of all the provincial Premiers, Alberta’s Danielle Smith seems the likeliest to make a deal with Trump. This is probably because Alberta does a lot of business with the United States selling oil and energy. Recently Smith showed some of her conservative friends she had painted her toenails red to show her support for Canada which fooled few, if any. A Leger poll conducted in March showed that 15 percent of Albertans would like to be part of the 51st state, as 9 percent of the population as a whole. This amazed me as every Canadian I’ve spoken to and of those I’ve read in print are dead against it. Smith has given Carney a list of energy-related demands which includes scrapping a federal tax on oil and gas emissions, eliminating an electrical vehicle mandate and ending prohibitions on single-use plastics. That sounds tough, but some of those issues apply to other provinces.

Carney now has to form a coalition of sorts to get legislation through. Besides taking on Trump’s junk, Carney will have to deal with a possible postal strike, a health system in near chaos, crime which is out of control, housing problems galore including homelessness and a soaring cost-of-living, especially grocery prices; like, ‘Good Luck Mate’. For the working class in Canada, life would be slightly better if Canada did not become state 51, but nevertheless exploitation is exploitation and whether one is exploited as an American or a Canadian it sucks and not a one of the recently elected MPs will take a stand against it.

Cooking the Books: The rich remained rich (2025)

The Cooking The Books column from the June 2025 issue of the Socialist Standard

‘Why’, the Times asked a few days after Trump announced the imposition of tariffs on imports into the US, ‘are global stock markets in a tailspin?’ Their answer was substantially correct and surprisingly honest:

‘The short answer is President Trump’s tariffs. The longer answer is that global investors are betting that the president’s tariff walls will result in a fall in corporate profits as companies face higher costs and lower demand for their goods. The prospect of falling profits encourages investors to sell their shares because it means companies will not be able to pay as much out in dividends and will be worth less in future’ (8 April).

Shares are, as the word suggests, a share in the ownership of a business and entitle their owner to some of the profits of that business. They can be traded in their own right independently of the activity of the business. The price at which they are bought and sold depends on the anticipated future profits of the business and is mainly arrived at through the expected stream of future profits being expressed as a notional capital sum which, if invested, would bring in the same amount. But this sum only exists as a share of anticipated future wealth which may or may not be realised.

This is where the Times was being honest in talking about ‘betting’ because that’s what trading in shares is partly about. Traders buy shares at a certain price because they calculate that the shares will bring in a bigger dividend or that they can be sold later at a higher price. But there is no guarantee that either will happen, any more than there is a guarantee that a horse you bet on will win. It may but, then again, it may not.

However, the stock exchange is not just a casino. It is also a place where a business can raise new or extra capital to invest by selling new shares. But once these have been issued and bought they can be traded and subject to betting and speculation just like any other shares. If their price goes up that does not of itself mean that the business that issued them has more capital to invest. Similarly, if their price falls, that doesn’t of itself reduce that capital.

The movement of the prices of shares does not affect, either way, the value of the real wealth in which capital has been invested. Obviously it does affect the amount of notional capital attributed to shareholders:

‘The world’s 500 richest people lost a collective $536bn (£417bn) in the first two days of stock market trading after Trump’s “liberation day” announcement last Wednesday. It was the biggest two-day loss of wealth ever recorded by Bloomberg’s billionaires index’ (Guardian, 7 April).

The losses here are calculated from the fall in the price of the huge holdings of shares that Musk, Zuckerberg, Bezos and the others hold in the companies they founded. But it was not a reduction in the capital value of the real wealth they own as the means of production held by their companies. That remained the same. It was a reduction in the size of a notional capital sum based on expected future profits, as traders adjusted their bets on the size of these. To some extent, a reflection of a change of betting odds.

The fall in share prices sparked by Trump’s tariffs did not mean that the value of any of the real underlying wealth the billionaires owned was wiped out, simply that the current market valuation of it was reduced.

Cooking the Books: The King of Tariffs (2025)

The Cooking The Books column from the May 2025 issue of the Socialist Standard

‘Trump often cites the “gilded age” of William McKinley, the late 19th-century president, who imposed tariffs at an average rate of 50 percent to protect the domestic farming sector from foreign competition’ (Times, 4 April).

Actually, it was the manufacturing sector that McKinley wanted to protect. When he was a congressman for Ohio he drew up the Tariff Act of 1890 that came to be known as the McKinley Tariff. Trump calls him the ‘Tariff King’, a crown he himself clearly wants to wear.

In 1888, with the campaign for tariffs in America in full swing, Engels published an English translation, with his introduction, of a talk on free trade that Marx had given in French in Brussels in 1848. Engels quoted Marx as saying (in chapter 31 of Capital) that historically protectionism had been ‘an artificial means of manufacturing manufacturers’. In his talk Marx criticised free trade too but came out in favour of it because it would hasten the development of capitalism and so bring on the final confrontation between the working class and the capitalist class. As he put it:

‘The free trade system hastens the social revolution. It is in this revolutionary sense alone, gentlemen, that I vote in favour of free trade’.

Engels’s introduction provided a useful historical survey of protectionism — including which sections of the propertied classes in different countries had benefited from it and which had not at various times — and some background on what led to the McKinley Tariff, but also made some points about the effect of tariffs on different sectors of capitalist business which are still relevant today.

One difference he mentioned was between those sectors which relied on imported materials and those which didn’t. Manufacturers who obtained within the country the materials to transform into what they sold welcomed a tariff on imports of their product as protecting them from outside competition. On the other hand, those manufacturers who relied on imported materials did not want a tariff on them as this would increase the cost of producing their product. Nor did importers want tariffs generally.

This was seen today in the immediate reaction to Trump’s 2 April ‘Liberation Day’ on Wall Street, where share prices reflect traders’ views on the future profit prospects of the quoted firms. Shares in Apple whose smartphones are manufactured in Asia fell by 9 percent and ‘Big multinational consumer groups were heavily in the red, reeling from tariffs on Asian production hubs. Nike slumped 14 per cent’.

Exporters are not keen on tariffs either as their products are likely to be targets of any retaliatory action taken by other countries. America doesn’t export much manufactured stuff (except weapons of war and pharmaceuticals). Apart from oil and gas, its main exports are agricultural products. Sure enough, this is what China’s retaliatory tariffs, announced two days later, were aimed at. ‘The latest measures are likely to have the most impact on US agricultural exports, including soya beans, wheat and corn’ (Financial Times, 4 April).

In short, not all its business sectors benefit when a country imposes tariffs. America today is no exception. Some capitalist businesses are in favour of Trump’s policy but some will be lobbying for exemptions, even campaigning against him. Not that there is any guarantee that his protectionism will succeed in ‘manufacturing manufacturers’ in America, or, rather, in raising them from the dead.

In any event, as Engels noted:

‘The question of Free Trade or Protection moves entirely within the bounds of the present system of capitalist production, and has, therefore, no direct interest for us socialists who want to do away with that system.’

McKinley was elected president in 1896 but was assassinated by an anarchist in 1901.

Editorial: Why tariffs are not an issue (2025)

Editorial from the May 2025 issue of the Socialist Standard

‘Tariff Reform, Free Trade or No Trade? The Fiscal Fraud Exposed’ was the front-page headline of the Socialist Standard in May 1910. It could be today too.

Britain was then a free-trade country with no tariffs on imports. This was the traditional policy of the Liberal Party, then in office, dating from the repeal of the Corn Laws in 1844 which had taxed imports of wheat and other cereals, resulting in higher rents for landowners and so lower profits for capitalists. By the turn of the century, however, British metal manufacturers were feeling the effect of competition from German and American producers and the cry went up for their profits to be ‘protected’. A demand taken up by the Conservative Party as ‘tariff reform’.

Both sides canvassed working-class support for their policy, employing the same specious arguments which we are hearing again today. The Free-Traders’ main argument was ‘cheap food’, that if tariffs were imposed then the price of food would go up and people would be worse off. Today, Trump’s opponents are saying that his tariffs will harm workers by putting up the price of computers, smartphones and clothes. The Tariff Reformers argued that a tax on imports would help preserve jobs in heavy industry and reduce unemployment. Trump, in photo ops with hard-hatted car workers and coal miners standing behind him, is employing the same argument, one that has attractions for the workers concerned and is often supported by their trade unions.

An increase in the cost of living and job security are matters that workers have to worry about. But tariff-free trade does not make workers better off and protective tariffs cannot ensure job security.

Wages reflect the money cost of creating and maintaining a worker’s labour power and tend to go up and down in line with the price of the basket of goods and services they need to do this. If the cost of living increases so, eventually, will money wages (the quicker, the more workers take union action to press for this). And vice versa.

Employers don’t employ workers to provide them with a job but to make a profit out of their work. They are always under competitive pressure to keep costs, including labour costs, down. One way of doing this is to install more up-to-date machinery that enables a worker to produce more in a given period of time. Which results in fewer workers being employed. This process continues even behind tariff walls.

Whether or not there are taxes on imports, workers remain economically dependent on those who monopolise the means of wealth production and have to work for them for a wage that is less than the value of what they produce or provide. Their interest lies in ending this situation by making the means for providing what society needs common property under democratic control.

Then there will be ‘no trade’ because what is trade but the exchange of products between separate owners? With common ownership it cannot exist. What there will be is the simple moving of products from where they are produced to where they are needed, a question of logistics and not a question of buying and selling — or of tariffs and other taxes.