The intensified re-establishment of tariffs by the Trump administration in April 2025 both expresses and sharpens contradictions between competing sections of national and international capital. Aimed at reinforcing U.S. imperialist hegemony – while temporarily concealing the deep roots of the capitalist crisis – tariffs are yet another tool wielded by capital to deepen the exploitation of the working class.
What underscores both the tariff chaos and the divisions within the U.S. bourgeoisie is its intensifying competition with China. China currently holds the second position in the imperialist world system, with its growth in key sectors already surpassing – or projected to surpass – that of the U.S. in the near future.
China’s commercial banking assets in 2023 totalled $51 trillion, significantly outpacing the $31 trillion held by U.S. commercial banks. This financial strength is matched by technological advances: in sectors such as 5G infrastructure, mobile connections, semiconductors, and base station deployment, China holds a clear lead. These developments are not merely symbolic – they point to a broader shift in the global balance of advanced productive forces.
China’s strategic goals are to reduce reliance on the U.S. dollar by making the renminbi a globally accepted currency for investments, trade, and reserves; to solidify trade settlement agreements with major oil exporters such as Russia and Saudi Arabia that allow payment in renminbi; and to continue competing with the U.S. in the most profitable industries – thereby increasing domestic profits for its monopolies and securing a stable foundation for the export of capital abroad.
The threat is so significant that it has pushed the U.S. to retreat from decades of proclaimed faith in globalisation as the key to both domestic and international growth. What once appeared as an unquestionable pillar of capitalist economics – open markets and free competition – now stands exposed as just one of many tools used by sections of the bourgeoisie to delay or deflect the systemic crises inherent in the capitalist mode of production.
In the U.S., since the 1950s, industrial production has seen a steady decline, with manufacturing now accounting for just 10% of economic output – down from 28% in 1953. At the same time, the U.S. has remained at the top of the imperialist world system, primarily through the export of capital. As of 2023, the U.S. held the largest stock of outward foreign direct investment (FDI), totalling over $6.58 trillion; its net international investment position stood at minus $23.6 trillion – equivalent to around 90% of its annual GDP.
However, this dominance is not stable. Reflecting growing hesitation in the face of rising geopolitical tensions and diminishing profitability, U.S. FDI inflows fell to $52.8 billion in Q1 2025 – the lowest quarterly level since late 2022. At the same time, China’s outward FDI stock reached $2.95 trillion in the same year – up from just $0.5 trillion in 2010 – signalling a rapid and strategic international expansion of capital.
On one side, the long-standing dominance of financial capital has underpinned U.S. imperialist rule, securing parasitic super-profits for sections of the bourgeoisie utterly divorced from productive labour. On the other, this same dynamic has generated deep contradictions for U.S. capital itself: first, the systematic dismantling of productive capacity has eroded the foundations of domestic capital accumulation; second, the rise of Chinese competition and declining internal reinvestment have weakened U.S. global primacy – threatening not only its geopolitical leadership, but more crucially, the unearned rents that sustain its parasitic capitalist class.
Tariffs are to be seen in this context. On one side, they express a contradiction: they are applied in the interests of some U.S. monopolies at a time when competition intensifies from rival imperialist powers such as China and the rate of profit stagnates. It is obvious that some sections of the bourgeoisie – particularly those that are export-oriented – may find tariffs harmful, due to their reliance on free markets and global supply chains.
Other sections – more production-oriented and domestically focused – see tariffs as beneficial, since protectionist measures can offer temporary relief from foreign competition and help preserve profit margins. This intra-bourgeois contradiction reflects the underlying instability of U.S. capitalism, where no unified strategy can fully resolve the crisis tendencies rooted in overaccumulation and declining profitability.
On the other side, the bourgeois state is always the state of the entire capitalist class. Acting as the ideal collective capitalist, it intervenes to balance the competing interests of different bourgeois factions, seeking compromises that – at the expense of the working class – ultimately serve the class as a whole. The seemingly fierce clashes between Republicans and Democrats should not obscure the fact that, while Trump’s measures may favour one section of the bourgeoisie, their aim is to preserve the overall dominance and profitability of U.S. capitalism – domestically-focused and export-oriented capital alike.
Divisions within the MAGA camp reflect competing strategies within the U.S. bourgeoisie over how best to secure national capital’s interests in a period of crisis and intensified global competition.
One faction, represented by figures such as Peter Navarro – former Director of the Office of Trade and Manufacturing Policy under Trump – advocates for a nationalist-industrial strategy. This current promotes tariffs, domestic production, and state intervention as means of shielding U.S. manufacturing from foreign competition, particularly China. Their line rests on the idea that reindustrialisation, secured through trade barriers, can restore profitability and imperialist dominion; however, this would also drive up the cost of imports and reduce the availability of goods – outcomes that would ultimately be compensated through intensified exploitation of the domestic working class.
In contrast, the finance capital faction – exemplified by figures such as Howard Lutnick, CEO of Cantor Fitzgerald and a known Trump fundraiser – is structurally embedded in global markets. This segment of capital depends not on physical production but on the circulation of money capital and, while it may tolerate certain tariffs as a geopolitical lever, its long-term profitability relies on relatively open markets, access to Chinese capital and growth, and macroeconomic stability. As such, it tends to resist aggressive trade wars and broad decoupling from global value chains.
A distinct position is held by the financial-technological bourgeoisie, represented by figures like Elon Musk. Though tactically aligned with parts of Trump’s agenda, Musk’s core interests – electric vehicles, space tech, digital platforms, and AI – depend on global markets, rare earths, and Chinese production. This puts him at odds with protectionist policies. Unlike traditional finance capital, however, Musk’s accumulation strategy hinges not only on speculation but also on future-oriented productive investments and infrastructure. This creates a hybrid position: aligned with globalisation in form, but oriented toward state-backed technological monopolisation in content.
The divisions within the MAGA camp are not ideological ruptures, but reflections of conflicting interests within the U.S. bourgeoisie. Whether nationalist or globalist, industrial or financial, all factions are united in their aim to preserve capitalist rule and extract ever more from the working class. The task of workers is not to side with one camp over another, but to organise independently – against the entire bourgeois class, regardless of the policies it pursues or the country in which it is based.