Martin Ralph
Britain and many countries are against U.S. protectionist policies that create massive subsidies via tax breaks and other incentives to deepen the trade war with China.
The economic shock waves emanating from this inter-imperialist trade conflict between U.S.A and China threatens greater conflict in the world capitalist system.
The 2022 Inflation Reduction Act (IRA), as part of the trade war aims to achieve a 40% reduction in greenhouse gases from 2005 levels, by 2030. This has been described as the most significant climate legislation in U.S. history. However, it requires many commodities to be “Made in America” and seeks to combat China’s growing investment in green technology production.
The IRA tax credits for “green” industries are conditional on production and final assembly being based in the U.S.
The massive subsidies through tax breaks to companies producing electric vehicles, batteries for electric vehicles, and other dubiously “green” technology may see European companies decamping to the U.S.
This is not only a problem for Europe as Japan, Canada and Australia have increased their protectionist investment in “green” energy batteries, solar panels, wind farms and solar panels in response to U.S. actions.
France is calling for a EU response to the IRA with a “Made in Europe” policy a relaxation of state aid rules, providing economic advantage to France and Germany.
There could be a mass-scale relocation of European businesses in clean hydrogen, carbon capture, and solar industries to the U.S. with the trade war against China spreading across the world.
While the U.S. and China engulfs the world in its trade war, the struggle for resources, markets, and control has pushed Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates to join BRICS.
UK falling behind
The UK is already behind the EU and the U.S. investment in “green” industries and electric car manufacturers in the UK say the IRA will make them less competitive as global investment will be drawn to the U.S.
The government refused to provide adequate subsidies supporting technologies and avoid the collapse of the Britishvolt start-up, which planned to build a giant factory to develop electric car batteries. Jaguar Land Rover has not committed to its planned EV UK production increase, and Arrival, a startup in electric vans, abandoned its plan to start production in the UK and relocated to the U.S.
The IRA also threatens Britain’s hydrogen industry. The London-based “green” hydrogen fund, Hydrogen One Capital, has confirmed plans to shift focus to the U.S. The UK’s £1.1 billion hydrogen projects may relocate if the government does not match U.S. support.
This decline in investment illustrates British capitalism’s weakness and industrial decay.
The capitalists have destroyed industrial production over many years and spent decades plundering the world and Britain. Years of austerity, privatisations, deindustrialisation, lack of investment, a world economy in crisis and trade wars mean the Brexit policy, dependent upon massively increasing global trade, as part of a utopian Great British policy has failed.
With trade is incredibly disrupted, and imperialist nations becoming more protectionist, British capitalism faces a mountain of problems.
The powerful financial markets of the City of London, along with a few powerful global companies, cannot save the British economy.
It will only survive by unleashing deep attacks on the working class and its most vulnerable including precarious workers, women and immigrants while it tries to fully privatise public services and places health and education under control of the multi-nationals. This will happen under a Tory or Labour government.
International conflict and struggle
China is laden with a deep economic crisis as its economy needs deep structural change. One option is to create a dignified work and social security system, healthcare and pensions, and for workers that only socialism and workers’ control can deliver.
The CCP will never provide comprehensive work and social welfare policies instead they continue their imperialist struggle against the other big powers and gain more exports by undercutting manufacturers in other imperialist countries by state aid and brutality against the working class.
British class struggle will intensify
British capitalism salvages what it can attacking and dividing the working class, but the strike wave and the mass mobilisations for Palestinians builds workers confidence to unite in struggle and fight back. Rising inter-imperialist rivalry shows working people in Britain the need for a real collaboration with European and all workers fighting for the future.
Bosses, governments and their policies impoverish workers and enrich themselves. Join us to build an international revolutionary party with the IWL for socialism and to build the fight back in the interest of the working class to oppose capitalism and imperialism in a concrete international struggle to overcome these dangerous imperialist plans.
