On Feb. 1, President Donald Trump imposed sweeping tariffs on imports from Mexico, Canada, and China, signaling the start of a potential global trade war. Dubbed “Tariffs to Protect Americans,” the policy sets a 25% tariff on most goods from Mexico and Canada and a 10% tariff on Chinese imports.
Tariffs have become a key part of Trump’s aggressive MAGA economic plan. On Jan. 27, he even called “tariff” the fourth-most beautiful word in the dictionary–after “God,” “love,” and “religion.” He often praises former President William McKinley, calling him “the tariff sheriff,” and claims that McKinley’s aggressive tariff policies sparked an era of “American prosperity.”
In truth, the booming U.S. economy of the late 19th century was driven by many factors, such as rapid industrialization, new technology, and the expansion of railroads. Yet the most significant factor was the flood of immigrants, who provided a large, low-wage labor force. Capitalist profits come from labor and require an expanding workforce to grow. These workers powered factories, built infrastructure, and boosted demand for goods and services.
McKinley believed high tariffs would shield U.S. industries from foreign competition and boost domestic growth. The McKinley Tariff of 1890 raised rates to record levels, especially on manufactured goods. Although some domestic manufacturers enjoyed short-term gains, the overall impact was harmful. U.S. companies paid more for imported materials, farmers lost export markets due to retaliatory tariffs, and consumers faced higher prices. In fact, the McKinley Tariff helped spark the Panic of 1893, a severe economic depression.
Trump’s tariffs could be just as disruptive. They will likely push up prices for everyday items like food and household goods, hit working families hard, and force companies that rely on foreign parts to cut jobs or even close plants. Manufacturing, shipping, and transportation jobs could be at risk as trade slows and companies shift production to dodge the tariffs. When production and shipping costs rise, the working class suffers.
How is Trump able to do this?
Trump’s broad use of tariffs is possible because power over trade has shifted from Congress to the executive branch over decades. Although the Constitution gives Congress the authority to regulate trade and set tariffs, presidents have slowly taken over these decisions.
Behind this is the growth and centralization of capital. The means of production have become centralized in ever smaller and more powerful groupings of financiers, industrialists, and military contractors, buttressed by huge mega-banks of transnational proportions, now popularly referred to as the oligarchy.
Capitalist development has fueled the rise of a handful of massive financial institutions and shadow banks tightly linked to the executive branch. The president now serves as the most direct and powerful tool of finance capital, some might say, of the oligarchs.
Congress has ceded power to the president. This shift benefits a small group of wealthy business interests and financial institutions that prefer fast, centralized decision-making over lengthy Congressional debates.
The president can impose tariffs with little oversight using laws like the International Emergency Economic Powers Act, Section 232 of the Trade Expansion Act, and Section 301 of the Trade Act. In short, Congress’s role has shrunk, allowing the executive branch to shape policy to favor an entrenched capitalist oligarchy.
Tariffs on Colombia
Tariffs have become a modern weapon used by Wall Street and the Pentagon. U.S. imperialism has turned economic pressure into a powerful tool–one that can cause more harm than bombs or guns. This tactic, sometimes called “dollar weaponization,” works because the U.S. dollar is the world’s primary reserve currency.
Because most international trade (especially oil) is done in dollars, and most banking transactions go through the SWIFT system and U.S. banks, the U.S. can use its control over these systems to wage economic warfare. When “weaponized,” these tools can restrict access to dollar transactions, freeze the assets of other countries, block them from trade, and control banking transactions through the SWIFT system.
Trump has a history of using tariffs for economic coercion. On Jan. 26, he announced steep tariffs on Colombia for not accepting U.S. military planes carrying deportees. Just ten hours later, he backed off after Colombia reversed its decision.
Tariffs on BRICS
Then, on Jan. 30, Trump warned that goods from BRICS nations would face 100% tariffs if they tried to move away from the U.S. dollar in international trade.
BRICS–initially founded by Brazil, Russia, India, China, and South Africa and now joined by Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates–is a coalition mainly of Global South countries. It is a counter to the G7 and NATO that offers an alternative to U.S. imperialist policies.
Although BRICS does not directly challenge the capitalist system, it offers a way for countries to resist imperialism and colonialism. For the working class, Trump’s hardline approach against BRICS is a warning. Tariffs and trade wars disrupt global supply chains, threaten jobs, and increase prices.
Instead of attacking countries that want to break free from imperialist control, we should stand in solidarity with workers around the world who are fighting for fair wages, safe conditions, and economic justice.