Trump's "Make America Great Again" tariffs a case of "be careful what you wish for"

Written by: Ned K. on 5 June 2025

(Above: sourced from https://www.cnn.com )

President Trump's tariffs imposed on its main enemy, China, are turning into their opposite. The tariffs imposed were supposed to revive the manufacturing sector in the USA to fulfil Trump's election slogan " Make America Great Again".

However, the Wall Street Journal reports that US-based major car manufacturers and car component companies are seriously considering relocating key car component manufacturing from the USA to China. 

The car component manufacturing most likely to be relocated to China is manufacture of electric motors to gain access to regular supply of the rare earth magnets which are essential components of the electric motors for cars. 

When the USA imposed the tariffs on Chinese made products, China responded by restricting the export of rare earth magnets to car manufacturers based in the USA. Despite the supposed 90-day freeze on imposition of the tariffs agreed between the USA and China, the supply of the crucial rare earth magnets from China has been slow, with US car manufacturers warning that they will have to close down plants.

China produces 90% of the world's rare earth elements essential for the magnets in electric motors and for other goods such as mobile phones. 

The US car manufacturing barons say they have no choice other than moving at least the electric motor manufacturing to China where there will be no restriction on the supply of the rare earth magnets installed in the complete electric motors. The export restriction imposed by the Chinese Government is on the magnets, not on the export of an electric motor manufactured in China.

The US car manufacturers see this as being better than the alternative of shutting down whole production lines in their USA-based plants.

The Wall Street Journal sees the irony in this situation between the competing big powers when it says, "If carmakers end up shifting some production to China, it would amount to a remarkable outcome from a trade war initiated by President Donald Trump with the intention of bringing manufacturing back to the US".

USA After Australia's Rare Earth Minerals

The USA is desperate to find alternative supplies of the essential rare earth minerals. Trump is trying to coerce the Australian Government to guarantee supply of rare earth minerals from the north of Western Australia, and also wants then from Ukraine, to decrease almost total reliance on China's rare earth minerals. In exchange Trump may decide to reduce the tariff on imports of products such a steel and beef from Australia.

Workers Lose Out Whether Free Trade Or Tariffs

The way capitalism in its imperialist stage arranges production and trade, it is workers who lose out. It is workers who lose jobs not only when one imperialist power imposes tariffs, but also when there are no tariffs and "free trade" wins out. Australian workers lost jobs in their thousands when "free trade" enabled manufacturers here to move plants to China and other developing cheaper labour countries in the 1980s through to the closure of the car industry here a decade ago.

Under capitalism, when workers lose jobs due to the anarchy of capitalist production on a global scale, they have to struggle for redundancy payments and have no guarantee of adequate income when redundancy pay runs out (usually capped at 12 or 16 weeks under the Fair Work Act in this country).  For workers who lose their jobs in many other countries, the situation is even worse with no redundancy payments at all.

Trade between countries will continue to occur. Under socialism, trade will still be required but the Australian economy will be based on people's needs first, not profits for a small minority. The surplus produced overall in the country will enable all workers to receive adequate income if there are any periods of unemployment due to changes internally in the economy or due to break down of trade with an external country that is still under capitalism.

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