By Felipe Alegría and Ricardo Ayala
1. China, the great enemy
As we have pointed out throughout this article, Trump’s general policy can be explained, first and foremost, by the challenge that China poses to US supremacy. In this regard, in the aforementioned article in Marxism Today magazine, we wrote: “Marco Rubio, Trump’s brand-new Secretary of State, stressed in his inauguration speech that ‘China is the most dangerous and powerful adversary the US has ever faced.’ Two years earlier, Biden’s Secretary of State Blinken made a similar statement at George Washington University: “We will remain focused on the most serious long-term challenge to the international order posed by China (…) the only country with the intention of reshaping the international order and, increasingly, with the economic, diplomatic, military, and technological power to do so.” (…)
In truth, since China’s emergence as a new imperialist power following its response to the great economic crisis of 2008, we have entered a prolonged period of conflict between the two imperialisms. It is a clash that conditions the march of the world economic organism, which has been globally stagnant since the 2008 crisis. It fully affects the global division of labor (GDL) and profoundly unbalances the System of States, relocating the role of countries and regions of the world. This antagonism has become a central axis of world politics.
Trump’s accession to the US presidency precipitates the crisis of the World Order, will accentuate trade, technological and geopolitical clashes with China, and fuels the global arms race, increasing tensions and the very real risk of military collisions.”
And we continued:
“Just a few days before the appearance of DeepSeek[1], the US agency Bloomberg pointed out that China was the world leader in electric cars (EVs), drones, solar panels, and high-speed trains, and was striving to become the leader in robots and medicines. The Chinese commercial aircraft C919 is already competing in Asia with Boeing and Airbus. If all this is of great relevance, even more so is the battle for leadership in semiconductors (currently in the hands of the US company NVIDIA) and AI, given that if China were to overtake the US in this field, it could trigger a seismic wave with enormous consequences.”
China is clearly inferior to US imperialism in the financial arena. The US is the great financial superpower, with the IMF and the World Bank at its disposal and supported by the role of the dollar as the universal currency. China is still far from being a financial alternative to the US, but it is striving to become, in parallel with its foreign investments, trade and alliances, such as the BRICS+, a global financial power and reduce its dependence on the dollar.
In the tariff negotiations with the US, which are still ongoing and whose outcome is uncertain and undoubtedly temporary, China, unlike the EU, stood firm, saying that the negotiations should be “between equals.” In the end, it was Trump who gave in, for the time being, due to the US’s high dependence on rare earths and Chinese industrial supplies.
However, this tactical victory cannot obscure the fact that China is suffering from a serious problem of overproduction (which is fueling a fierce internal price war in the electric vehicle sector[2]) that is intertwined with an endless real estate crisis that is wreaking havoc on local government finances, along with high youth unemployment and sluggish consumption. An estimated 16 million jobs depend directly on exports to the US, although the figure is significantly higher if we consider indirectly related jobs. Trump is trying to exploit this reality to block China’s rise and force a recession. One of his important weapons is tariffs on ASEAN countries[3], where Chinese investments seeking to circumvent US trade barriers are concentrated.
Emerging Chinese imperialism is at an important crossroads. Given that it will not allow a substantial increase in domestic consumption, which would imply reducing the degree of exploitation of its working class[4], it is forced to take a leap forward in its external expansion, establishing zones of influence in what is known as the Global South, in open confrontation with the US. This affects exports but goes further.
In this regard, influential Chinese economist Huang Yiping [5], a member of the Monetary Policy Committee of the People’s Bank of China, recently advocated a “Chinese Marshall Plan.” This is how he described the so-called “Global Green Development Program for the South,” designed to “alleviate the pressure of China’s excess capacity and make the developing world greener and, in the long term, forge a closely knit strategic nexus of co-development.” Another influential economist, Yao Yang[6], acknowledges China’s excess capacity, which he defines more precisely as “excess capital,” and also argues that exports should be accompanied by joint ventures in areas such as electric cars, solar energy, and wind energy in imperialist countries such as those in the EU, drawing a parallel with the Western joint ventures that have been set up in China.
2. The EU at a difficult crossroads
Europe, particularly the European Union (EU), appears in this international picture as a minor power in crisis, caught in the middle of the conflict between the US and China. In truth, the EU is not a homogeneous imperialist bloc but a grouping of states with different interests, led by Germany and France. The EU is powerless to act as an “alternative imperialist power” and subordinates itself to the US on key international issues, despite conflicts between the two sides. This is demonstrated by the words of the UN Special Rapporteur for Palestine, Francesca Albanese, who recently stated that “EU states preach international law, but are guided more by a colonial mentality than by principles, acting as vassals of the US empire.”
The dismantling and subjugation of the EU is one of the important elements in the US global plan. China, for its part, is trying to draw the EU toward itself and make it autonomous from the US. The EU is at a historic crossroads: what will Germany and France do, with an EU in crisis, without the strength to act alone on a global scale and with interests that, moreover, do not coincide on substantial issues?
Practically insurmountable difficulties arise when it comes to establishing an autonomous European imperialist center. The EU project is in deep crisis: sandwiched between the US and China, with Trump (and Putin) actively working to weaken and divide it. The pro-European proposals of Enrico Letta or Mario Draghi (which could be summarized as “let the EU function as a single state”) lack a firm support base. On the contrary, far-right forces such as Hungary’s Orbán, Slovakia’s Fico, Poland’s PiS, Germany’s AfD (directly supported by Vice President Vance), as well as the Dutch Wilders, France’s Marine Le Pen, and Italy’s Meloni, all associated with Trump, Putin, or both, are opposed, with varying degrees of forcefulness, to Franco-German Europeanist aspirations. France and Germany, moreover, are openly threatened by the electoral rise of the anti-European far right.
Germany, in full retreat, is suffering a long recession, and in decadent France, the Bayrou government has just announced a brutal austerity plan (from which only military spending is spared), arguing that the country is on the verge of bankruptcy. At the same time, French military forces have just been expelled from their last military bases in Africa. We are also witnessing a kind of militaristic metamorphosis of the Draghi plan[7], led by European Commission President von der Leyen and the German and French governments.
However, for the EU’s “military Keynesianism” to have an impact on sustained GDP growth, it would involve manufacturing weapons in Europe and then selling them to third parties, since otherwise the initial stimulus from military spending would quickly run out. And this is where a key question arises: does anyone think that European governments will unify their arms production, refuse to spend money buying arms from the Americans, and enter into open competition with them on the global arms market?
What we saw at the NATO meeting in The Hague at the end of June was a flagrant display of European servility towards Trump and his demands, expressed in the approval of an increase in military spending to 5% of GDP (an additional $1 trillion per year). This implies a sharp increase in government debt, severe cuts in basic welfare state services, and higher taxes. Furthermore, it confirms a high degree of subordination to the US, which will find itself with much freer hands to concentrate its forces against China in the Indo-Pacific and with an arms industry benefiting from a huge additional portfolio of European orders. Coinciding with the meeting, German Chancellor Friedrich Merz, with an economy heading into its third year of recession, has announced an impressive program of US arms purchases worth nearly $10 billion and, of course, new purchases from Israel in the midst of the carnage in Gaza and the West Bank.
At the same time, territorial claims are beginning to resurface within the EU, taking us back to the era of World War I and calling into question the current territorial division of Europe. This is the case of Moldova by Romania and Transcarpathia by Hungary. These territorial claims that are beginning to take shape are favored by Trump’s condescension toward Putin’s claims regarding Ukraine, which in turn fuels the risks of Russian military incursions in the coming years in countries that belonged to the USSR, in Asia, the Baltic countries, Moldova…
The progress of the tariff negotiations with the Trump administration, which are still ongoing, shows the same servile weakness of the EU towards the US. Trump, moreover, only considers the trade balance with the EU and not that of services, where the US surplus is significant. It also ignores the fact that a significant part of the trade deficit comes from the fiscal maneuvers of US multinationals that use Ireland as an export base to avoid taxes by artificially inflating prices. In other words, if we take these factors into account, the deficit is non-existent. This is without even counting the repatriation of profits by US banks and multinationals. However, Trump has sent a letter to von der Leyen setting a prohibitive tariff of 30%. How will the EU, Germany, and France respond?
3. The future and the class struggle
Throughout this article, we have considered the struggle between the US and China. A key question to ask is: who will hold out longer without falling into crisis? Will Trump succeed in imposing a blockade on the Chinese economy? Will the overproduction of capital find outlets or end up causing a serious crisis in China? Will the US be the first to fall into a severe economic recession? How will the enormous and growing US public debt affect the economy inside and outside the US? What will the EU’s response to Trump’s tariffs ultimately be? How will these tariffs affect European economies and the very cohesion of the EU? What will be the response in semi-colonial countries?
However, it is possible that among Trump’s biggest problems will be internal resistance to his measures from workers and the people. We have seen massive demonstrations in Los Angeles and other cities against deportations and ICE raids, as well as the large national mobilization No Kings Day on June 14, in which more than five million people participated in 2,100 locations. We will see how this movement continues, the steps it takes in its self-organization, and the degree of independence it achieves in relation to the Democratic Party apparatus.
In China, too, Xi Jinping may encounter significant social unrest, despite the absence of trade union freedoms and the presence of official “trade unions,” which are apparatuses of control for the regime and the bosses. Of note is the recent wave of protests[8] that has spread, with varying intensity, throughout the country. There have been conflicts in manufacturing and construction and, more recently, in education and healthcare. Wage arrears continue to be the common denominator in the vast majority of protests. In manufacturing, they have been concentrated mainly in Guangdong and affect export-oriented industries. Significant protests have taken place at two Foxconn factories (the world’s largest supplier of iPhones) and at two factories belonging to ByD, the leading manufacturer of electric cars. The construction sector has accounted for more than half of the collective protests in 2025, reflecting the persistence of the Chinese real estate crisis.
We are living in a time of transition with enormously complex scenarios and alternative hypotheses. The inter-imperialist struggle is combined with a generalized offensive against the working class throughout the world, in the imperialist countries and in the semi-colonial countries, and with the continuation of wars and armed conflicts.
The course of the genocide in Gaza and the West Bank and the resistance to Zionist barbarism, as well as the march of the Ukrainian war against Putin’s invasion, with Trump fraternizing with the aggressor, will mark the coming period, defined by a sharpening of the class struggle that is breaking through.
If anything is clear in this situation, it is the vital need to take substantial steps in the self-organization of workers and the oppressed and, in the heat of this, in the construction of an independent, revolutionary workers’ alternative that shows that we can find a socialist way out of the catastrophe to which the decomposition of world capitalism condemns us. This is what we want to contribute to from the International Workers League (IWL).
[1] The AI model of the company OpenAI
[2] While millions of electric cars are stuck on Chinese manufacturers’ premises, on May 23, ByD, the largest manufacturer, lowered the prices of its cars by between 15% and 30%, triggering a real explosion in the price war that has been affecting the sector for many months. The Chinese government has had to intervene and has announced, among other measures, the disappearance of numerous unprofitable electric car brands, encouraging mergers.
[3] Association of Southeast Asian Nations (ASEAN)
[4] With regard to working conditions, the Hong Kong newspaper South China Morning Post (SCMP) reports on the widespread existence of the well-known 996 regime, common among Internet and technology companies: working hours from 9 a.m. to 9 p.m., six days a week, despite labor laws prescribing an 8-hour workday, 44 hours per week, and one day off per week. The situation of construction workers (almost all of whom are migrants from rural areas) is one of semi-slavery, with no weekly rest day. A similar situation exists for workers at ultra-fast fashion brands Shein and Temu, who are also rural migrants, with one day off per month, 75 hours of work per week, and piecework pay.
[5] SCMP, November 18, 2024.
[6] https://www.scmp.com/economy/global-economy/article/3309715/unswerving-superpowers-meet-unsustainable-tariffs-yao-yang-breaks-down-paradox Published on May 12, 2025.
[7] The Draghi Report, delivered in September 2024 under the title The Future of European Competitiveness, advocates a common European strategy to halt the decline of the EU. It proposes establishing a common foreign economic policy and an industrial strategy, a common technology policy, and a single capital market, including joint debt issuance. It also proposes extending the single market to energy, telecommunications, and the military industry.
[8] https://andreaferrario1.substack.com/p/la-cina-sotto-pressione-mobilitazioni
