Trump at the inner barrier of capital

Trump at the inner barrier of capital

The reindustrialization of the US, which Trump wants to force through his protectionism, is being undermined by automation trends in industry.

Tomasz Konicz

[This article posted on 5/22/2025 is translated from the German on the Internet, https://www.exit-online.org/trump-an-der-inneren-schranke-des-kapitals/.]


What does Donald Trump want? Since the so-called “Liberation Day” in early April, when the right-wing populist announced the introduction of comprehensive tariffs on almost the entire late capitalist world, Washington's specific provisions, tariff rates, and exemptions have been changing almost weekly. The economic uncertainty caused by Trump's protectionism is considered by economists to be an important factor that could contribute to an economic slowdown or even recession in the US. Companies and corporations cannot make reliable calculations, trade between the US and China has largely come to a standstill, and supply bottlenecks are almost inevitable in the United States despite the recent postponement of the trans-Pacific trade war.

First and foremost, Donald Trump wants to bring back around seven million industrial jobs. Employment in the US industrial sector has been declining for more than 40 years,[1] from just under 20 million industrial workers in 1978 to just under 13 million in 2023. Between 2002 and 2022, the number of industrial companies in the United States fell by 45,000, representing a decline of around 14 percent within two decades.[2] This deindustrialization of the US led to the very social disruption that propelled Trump back into office – and the White House must address this misery, precisely because the increasingly authoritarian Trump administration can hardly afford to be voted out of office without ending up in jail for multiple obvious violations of the law. The consolidation of an authoritarian regime in the United States can only be achieved by socially pacifying broad sections of the population, similar to what Putin has managed to do in Russia.

And, viewed from a narrow national perspective, the connections are clear: the deindustrialization of the US goes hand in hand with the accumulation of massive trade deficits with China and German Europe in the age of globalization. Last year, the United States recorded a new record deficit of $1.211 trillion,[3] far exceeding the highs during the US real estate bubble in 2006 ($786 billion) and the post-COVID era in 2022 ($971 billion).[4] Last year, the US recorded a deficit of $295 billion with the People's Republic of China alone,[5] while the EU recorded a deficit of $235 billion, of which $84 billion was attributable to Germany.[6] Trade surpluses are used to export deindustrialization and debt, which was also at the heart of the German beggar-thy-neighbor economic model during the heyday of globalization. This correlation is also evident in the share of industrial production in total GDP,[7] which in 2023 was around 26 percent in China, 18.5 percent in Germany, and only around 10 percent in the US (in the 1970s, it was still just under 25 percent).

[8] So is this a big scam, as the Trump administration claims in order to legitimize its protectionism? The relationship between job losses in the industrial sector and the actual output of US industry makes it clear that it was primarily competition-driven productivity gains that led to the deindustrialization of the US.

Between 1980 and 2000, at the same time that the industrial workforce in the United States declined from just under 19 million to 17 million,[9] US industrial production roughly doubled (percentage figures from the Federal Reserve, adjusted for inflation to 2017 prices).[10]

Rising industrial production accompanied by declining employment in the industrial sector is an expression of the rationalization drives in goods production in the wake of the IT revolution beginning in the 1980s. It is the empirically verifiable consequence of the internal barrier of capital—the competition-driven tendency of the capitalist exploitation process to rid itself of its own substance, the value-creating labor in goods production. Even in the 21st century, when the industrial workforce in the US declined massively (from 17 million to just under 13 million), the output of this shrinking industrial workforce stagnated[11] without a corresponding decline (the crisis-induced slumps in industrial production in 2009 and 2020 were quickly reversed).

What's more, according to the US industrial association National Association of Manufacturers[12], value added in the United States totaled around $2.93 trillion in 2024 (compared to just under $1.8 trillion in 2010 and only $1.38 trillion in 1997),[13] with the United States paradoxically gaining ground primarily in foreign trade. Exports from the manufacturing sector have more than doubled in the last two decades, from $622.3 billion in 2002 to $1.63 trillion in 2024. So what is Trump and his entourage getting so worked up about? Well, during the same period—the heyday of globalization—the volume of world trade more than tripled: from $4.9 trillion in 2000 to $9.8 trillion in 2010 to $15.7 trillion in 2023. The US share of world trade has thus fallen to 7.9 percent in 2023.

The countervailing trends in capitalist commodity production – the lack of new labor-intensive areas of exploitation – were also noticed and addressed by US monetary policy. As early as 2014, the US Federal Reserve noted[14] that industrial production in the United States continues to grow (with the exception of short-term crisis-related slumps), while this is not the case for employment, meaning that “industrial growth is not synonymous with growth in industrial jobs.” The Fed offered “productivity growth” and a shift in sectoral focus toward “computers and electronics” as possible explanations.

Trump's protectionist policies thus seem to be failing due to the increasingly apparent internal barrier of capital, which is relentlessly advancing through competition-driven rationalization and the melting away of the mass of expended labor in commodity production. (The idea that capitalism could be reproduced as a financial market-driven service society was already discredited in 2008). This is particularly evident in developments in China, where Trump's protectionism believes it can recover lost industrial jobs. For even in the state-capitalist workshop of the world, which owes its economic rise to an army of millions of mercilessly exploited cheap workers, automation trends are spreading ever faster.

China is now the global leader in the installation of industrial robots. By 2023, the People's Republic will have overtaken Japan and Germany in the automation of goods production: 470 industrial robots per 10,000 wage earners were in use in China, compared with 419 in Germany and 429 in Japan.[15] The momentum of this automation push is dizzying: in 2023, more than twice as many robots were put into operation in the People's Republic than in the next five industrialized countries combined. More than 50 percent of global demand for robots in 2023 came from the world's automating workshop.[16] Meanwhile, forecasts predict that the People's Republic will become the center of robotics, where more than half of humanoid robot production will be located this year.[17]

And it is precisely Trump's protectionism that is prompting capital to push ahead with automation in the reshoring process in the United States. According to US automation service provider Formic, which specializes in the leasing of industrial robots, the general uncertainty caused by trade disputes will lead to a 17 percent increase in the use of robots by the beginning of 2025. The new industrial plants that Trump's capricious tariff regime is intended to provoke would also be built at the globally accepted level of productivity, which would entail a high degree of automation. Chinese robotics manufacturers in particular are likely to sense new market opportunities here. Trump's crazy idea that millions of US wage earners would manufacture smartphones by hand is becoming obsolete even in China due to rapidly advancing automation.

Ultimately, however, Trump's reshoring fantasies are pie in the sky, overlooking the connection between ailing industrial production and bloated global financial markets. Hyperproductive global industrial production was dependent – especially in China – on a global deficit economy with the US at the center of deficit cycles, in which global debt has risen faster than global economic output since the 1980s. And it is precisely this deficit economy, achieved through increasing financial bubbles, that has come to an end since the big inflation surge of 2020, after central banks were forced to curb their expansionary monetary policy. According to the IMF, global debt fell between 2021 and 2023,[18] contributing to the global economic slowdown, the widening of the US deficit, and the increasing destabilization of the global economy, which has been globalized through deficit cycles.

The erratic, contradictory behavior of the White House mentioned at the beginning is primarily an expression of this contradiction: The US trade deficit is exploding because its trading partners are having to rely more heavily on exports due to the economic slowdown, while Trump's protectionist measures are jeopardizing the dollar's position as the world's reserve currency and causing turmoil on the US bond markets. Trump anticipated turbulence with his protectionist turn, which is why he wanted to initiate it immediately after taking office – but it was the rapid rise in US government bond yields that forced him to change course. US trading partners such as Japan are now threatening to sell off US government bonds in negotiations.[19] It is virtually the nuclear option in the trade war, which also highlights the absurd state of late capitalist commodity production, whose production surpluses are exported to the US, which in turn can indebt itself in the world's reserve currency as the measure of all commodities.