Vietnam among hardest hit by Trump tariffs

Peter Symonds

Governments, corporations and investors throughout Asia are in shock after Trump declared economic war on the world last week and announced huge “reciprocal” tariffs on friend and foe alike. While China—regarded in Washington as the chief threat to American global dominance—was hit with an extra 34 percent tariff on all exports to the US, Trump imposed hefty tariffs on most countries in the region.

Workers assemble electric cars at a Vinfast factory in Hai Phong, Vietnam, on Sept. 29, 2023 [AP Photo/Hau Dinh]

Among the hardest hit were the 10 countries that form the Association of South East Asian Nations (ASEAN), most having tariffs of 30 percent or more imposed putting them towards the top of the list. These were: Cambodia (49 percent), Laos (48 percent), Vietnam (46 percent), Myanmar (44 percent), Thailand (36 percent), Indonesia (32 percent). Malaysia (24 percent), Brunei (24 percent) and the Philippines (17 percent) were a little lower. Singapore was the only member to be given the baseline minimum of 10 percent.

Many of the ASEAN countries benefited from the tariffs imposed on China under the first Trump administration and maintained by the Biden administration along with punitive bans targeting hi-tech Chinese corporations. Companies that had used China as a cheap-labour platform adopted a China plus One strategy, shifting part of their production to South East Asia countries to avoid the US tariffs imposed on China.

Now governments internationally are scrambling for a strategy: seeking negotiations with the Trump administration, looking for other markets, while deeply concerned about the prospect of global recession, a sharp slowdown in their economies, rapidly rising unemployment and social unrest.

Vietnam, which is heavily dependent on exports to the US, is among the hardest hit and most vulnerable.  Last year, it ranked eighth among the top trading partners of the US with total bilateral trade of $US149.6 billion, up by a huge 20.4 percent increase from 2023. The country also became the US’s sixth largest source of imports last year worth $136.6 billion, and recorded a record trade surplus with the US of $123.5 billion.

The government immediately rushed to try to open up negotiations with the Trump administration. In a letter to Trump last weekend, Vietnam’s top leader To Lam asked for a delay of at least 45 days in imposing the “reciprocal” tariffs, due to come into force tomorrow, to allow for talks.

Lam called on Trump to appoint a US representative to lead negotiations with Ho Duc Phoc, the Vietnamese deputy prime minister, “with the goal of reaching an agreement as soon as possible,” so as to avoid devastation to the Vietnamese economy and increased prices for American consumers. Lam also suggested that he and Trump meet in May.

Lam was one of the first international leaders to phone and speak directly to Trump. According to the Vietnamese government, he offered to reduce tariffs on all US imports to zero and urged Trump to do the same for Vietnamese imports into the US. Trump later described the call as “very productive,” but did not indicate whether any negotiations would take place.

The Vietnam Chamber of Commerce and Industry and the American Chamber of Commerce in Hanoi also expressed deep concern to US Commerce Secretary Howard Lutnick in a letter dated Saturday, saying the tariff was “shockingly high.”

“Lower tariffs for products coming into Vietnam, and for products reaching the American consumer is what will help U.S. companies, the economy, and consumers. Higher tariffs will not,” the letter declared.

Major US corporations including Intel, Nike, First Solar, Boeing and Apple have invested heavily in Vietnam to manufacture their goods and components as part of their global operations, including exports to US markets. The imposition of a 46 percent tariff on all exports to the US would inevitably affect their plans and lead to plant closures and job losses.

Various estimates have been made of the impact of the Trump tariff on the Vietnamese economy ranging from as little as a 1 percent loss in GDP growth to as high as 5.5 percent. Around 30 percent of Vietnam’s exports go to US markets. The latest government economic data released on Sunday recorded year-on-year growth of 6.93 percent, already significantly below the government’s target of at least 8 percent for 2025.

Vietnam has already been hit by previously announced Trump tariffs on steel and aluminium of 25 percent. Last year Vietnam was the US’s fifth largest source of steel, up from ninth place the previous year. Steel mill products for the US market from Vietnam jumped in 2024 by a huge 143.3 percent from 2023, reaching 1.2 million tonnes.

The Vietnamese government is clearly desperate for negotiations and a reprieve from the Trump administration’s crippling tariffs, but all indications are that the White House will proceed with the economic shock treatment without exception.

While Trump commented favourably, although vaguely, about his phone call with Lam, during his “Liberation Day” announcement of tariffs last Wednesday he declared Vietnam a “worst offender” in trade imbalances. “Vietnam, great negotiators, great people. They like me, I like them. The problem is they charge us 90 percent, we’re going to charge them a 46 percent tariff,” he said.

His senior trade counsellor Peter Navarro flatly dismissed Vietnam’s offer of reducing all tariffs on US goods to zero, saying it was not enough. “It’s the non-tariff cheating that matters,” he said, citing intellectual property theft and a value added tax. Navarro, a notorious anti-China hawk, lashed out at Vietnam in particular for allegedly being a conduit for Chinese products as a means of avoiding US tariffs.

Speaking to Fox News, Navarro declared: “Vietnam is essentially a colony of communist China. China uses Vietnam to trans-ship to evade the tariffs. How does that work? Vietnam sells us $15 for every $1 we sell them. And about $5 of that is just Chinese product that comes into Vietnam, they slap a made-in-Vietnam label on it, and send it here to evade the tariffs.”

As Navarro well knows, Vietnam, far from being a Chinese colony, has had bitter disputes with Beijing over territorial boundaries in the South China Sea, which successive American administrations have sought to exploit.

While Vietnam is particularly exposed to Trump’s economic war against the world, every other country in South East Asia is in the same boat. To a lesser or greater extent, they all rely on exports into the US market and will also be indirectly affected by any slowdown in China as a result of the Trump tariffs. For most, China is their major trading partner. As a result, all face great economic uncertainty and the prospect of social and political upheaval.

Trump threatens to hike anti-China tariffs again amid growing financial turmoil

Nick Beams

In the midst of growing turmoil in global financial markets, which has seen trillions of dollars wiped off share values around the world as a result of the US economic war, President Trump has threatened a further 50 percent hike in tariffs on goods coming from China.

President Donald Trump is seen on the television as traders work on the floor at the New York Stock Exchange in New York, Monday, April 7, 2025. [AP Photo/Seth Wenig]

The threat is in response to the retaliation by Beijing to the so-called 34 percent “reciprocal tariff” imposed on China last week.

In a social media post, Trump wrote that if China did not remove its 34 percent response by today, “the United States will impose ADDITIONAL tariffs on China of 50 percent effective April 9th.”

If the additional tariff is imposed, it would bring the cumulative tariffs imposed on China to more than 120 percent.

There are no signs that Beijing is backing down, and it does not appear to be seeking negotiations or talks. Rather, it seems that Beijing is of the view that the fall in Wall Street—the market is on the verge of entering bear market territory (a fall of 20 percent from the previous high)—will mean the US will buckle.

Responding to the latest US threat, a spokesperson for the Chinese embassy said: “This is a typical move of unilateralism, protectionism, and economic bullying. We have stressed more than once that pressuring or threatening China is not a right way to engage with us. China will firmly safeguard its legitimate rights and interests.”

In other statements yesterday, Trump insisted that, contrary to some media reports, he was “not looking” for a pause in the imposition of the tariffs to allow for negotiations with the “many countries” seeking talks.

“We’re going to get fair deals and good deals with every country, and if we don’t, we’re going to have nothing to do with them; they’re not going to be allowed to participate in the United States,” he said.

Speaking at a press conference after a meeting with Israeli Prime Minister Benjamin Netanyahu, he indicated that while there could be negotiations, “there are things that we need beyond tariffs.”

This comment points to one of the wider objectives of the tariff war, which is to align countries with the foreign policy of US imperialism, above all its drive against China.

This was indicated in the Fact Sheet on the tariff announcement of April 2, which said there could be an adjustment to decrease tariffs “if trading partners take significant steps to remedy non-reciprocal trade arrangements and align with the United States on economic and national security matters.”

The biggest “national security” issue as far as the US is concerned is the economic rise of China, which it considers the greatest threat to its global dominance and which it is determined to crush by all means it considers necessary, including war.

The objectives of the administration were set out by Trump’s senior counselor for trade and manufacturing, Peter Navarro, in a comment piece published in the Financial Times (FT).

Navarro, the leading anti-China hawk in the Trump entourage, said the international trading system was broken. It was “rigged against America,” resulting in a “national emergency threatening our economic prosperity and national security.”

He insisted the issues went far beyond tariffs as such and included the “barrage of non-tariff weapons,” including subsidies, product standards, licensing regimes, customs procedures, to name but a few, which were used to “strangle American exports.”

Among the hardest-hit countries are in Southeast Asia—Cambodia faces a 49 percent tariff, and Vietnam 46 percent—which have become manufacturing platforms for companies, including many US firms, that shifted some of their operations out of China to try to avoid the tariffs imposed under the first Trump administration.

Navarro’s comment made clear why the offer by Vietnam to cut its tariff to zero cut no ice, because the tariff hikes on this region have been directed against China.

“We want to hear from countries including Cambodia, Mexico, and Vietnam that you will stop allowing China to evade US tariffs by trans-shipping exports through your countries,” he wrote.

In the market turmoil yesterday, Asian stock markets were the hardest hit. The biggest fall was recorded by Hong Kong’s Hang Seng index, which dropped by more than 13 percent, its worst single day this century, outstripping the falls recorded in 2008 and the pandemic selloff in March 2020.

At the end of the global trading day, Wall Street steadied after the two-day selloff last week, the fourth-largest in the post-war period.

The day began with a further steep decline. The market then rose on incorrect reports that Trump was considering a pause in the tariff hikes and then came back down again, with the S&P 500 finishing with a loss of only 0.2 percent.

But the market turmoil is far from over. It could be about to enter a new phase.

The big hedge fund investors are financed by the banks to make their deals and have to stump up money to continue to receive credit. As the price of their assets falls, the banks issue a margin call for increased funds. Such calls are now increasing as the value of financial assets plummets, and investors are being put in a position where they may need to sell some of their assets to meet the call, which can then result in a broader selloff and even a panic.

The trading day was marked, above all, by statements from leading financial oligarchs about the depth of the crisis now confronting the US economy and its financial system as a result of the global mayhem caused by Trump’s tariff war.

Many of them backed Trump in the election on the basis of his promises to further cut taxes and regulations, opening the way for their accumulation of wealth to even greater heights. They took account of his tariff threats but considered they would be essentially ‘transactional,’ aimed at securing concessions from trading partners.

But they have now discovered they got rather more than they bargained for. No one envisaged that the Trump agenda would involve the destruction of the entire international trading system.

The warnings of the consequences of the Trump regime’s actions for both the US and global economy have come thick and fast.

Multi-billionaire hedge fund chief Bill Ackman said the US was “heading for a self-induced nuclear winter” and called for a 90-day pause to resolve issues by negotiation.

“If, on the other hand… we launch economic nuclear war on every country in the world, business investments will grind to a halt, customers will close their wallets and pocketbooks, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.”

While piling on support for Trump in the election campaign as he made clear tariffs were a central part of his agenda, Ackman said: “This is not what we voted for.”

Addressing a gathering of business executives and investors at the Economic Club of New York, Larry Fink, the head of the world’s biggest asset management company, BlackRock, said the US economy was “weakening as we speak.” The FT reported that there were “audible gasps” from members of the audience as he spoke.

“When you see a 2 percent market decline in three days obviously it has significant impacts, and the ripple effect of the potential of tariffs is going to be long-standing. The market is impacting Main Street.”

Ken Lagone, a long-time Republican donor, co-founder of the retail giant Home Depot, lambasted the Trump tariffs in an interview with the FT, saying they were too high and had been carried out too quickly.

The 46 percent tariff on Vietnam was “bullshit,” and the 34 percent tariff hike against China was “too aggressive, too soon.”

In his widely-read annual letter to shareholders, JP Morgan chief executive Jamie Dimon warned that the tariffs “will probably increase inflation and are causing many to consider a greater probability of a recession.”

He said the quicker the issue was resolved, the better because “negative effects increase cumulatively over time and would be hard to reverse.”

Michael Strain of the right-wing, free-market supporting American Enterprise Institute issued a comment warning that the damage caused by tariffs, wiping off trillions of dollars in share values, would not be limited to financial markets.

“Around half of all imports into the US homeland are used by American manufacturers as inputs to produce goods. By increasing the costs of production, Trump’s tariffs will reduce the competitiveness of US manufacturers. This will destroy manufacturing jobs, not promote them. Higher consumer prices from tariffs and trillions of dollars of wealth destruction will reduce consumer spending, threatening recession and rising unemployment. Uncertainty will freeze business investment, likely leading to layoffs. US manufacturing exporters will be hit hard by any foreign nations that choose to retaliate,” he said.

But despite these and many other such warnings, and the fall in the stock market, Trump has insisted there will be no let-up. Speaking to reporters on Sunday, he said: “I don’t want anything to go down. But sometimes you have to take medicine to fix something.”

But the problem that confronts Trump and every other representative of the capitalist ruling class, whatever their differences with Trump, is that there is no ‘fixing’ of the global capitalist economy on the basis of their policies.

It is wracked by the objective contradiction, irresolvable within the framework of the private profit system, between globalized production and the division of the world into rival nation-states and great powers that has now erupted in the form of a global economic and trade war.

Child poverty soars as UK Labour government slashes welfare to fund armed forces

Tania Kent

UK Chancellor Rachel Reeves’ plan to slash £15 billion in public spending in the Labour government’s Spring Statement has already thrown tens of thousands of children deeper into poverty.

The cuts were made to fund upping military spending by billions to reach a targeted 2.5 percent of GDP by 2027. Reeves announced an extra £2 billion for the Ministry of Defence towards this target.

Sir Keir Starmer’s right-wing government—with just nine months in office—is now the only Labour government in history that has increased child poverty under its rule.

Official figures for 2024 showed a record 4.5 million children are living in poverty. The government policies will throw a further 250,000 people into poverty at a stroke, including tens of thousands of children. Child Poverty Action Group estimates that 30,000 more children will have fallen into poverty by April 6 due to Labour’s policies. It expects the overall number to rise to 4.8 million by the end of this parliament.

Sir Keir Starmer, leader of the Labour Party, and Bridget Phillipson, Shadow Education Secretary, speak to parents during a visit to Nursery Hill Primary School, in Nuneaton, Warwickshire, June 2024. [Photo by Keir Starmer / Flickr / CC BY-NC-ND 2.0]

The most vulnerable and defenceless in society were targeted by the Spring Statement, with Reeves imposing brutal cuts of £4.8 billion on the disabled. The universal credit health component, claimed by many disabled people, will be cut by 50 percent and frozen for new claimants until 2030. Reeves announced that welfare spending as a share of GDP “will fall between 2026-27 and the end of the forecast period [2030].”

Annual poverty figures published by the Department for Work and Pensions (DWP) showed that cuts to disability and incapacity benefits will push 50,000 children and 200,000 disabled adults into relative hardship by the end of the decade. But even these dire statistics have been assessed independently as being a gross underestimation of the real impact the cuts will have.

According to the New Economic Foundation (NEF), the “cuts will hit Disabled people by almost £2 billion more than the reported figures and could see around 100,000 additional people pushed into poverty.”

It noted, “The headline figures downplayed the scale and impact of these cuts by factoring in the decision not to proceed with a policy announced by the previous government and penciled in, but never fully confirmed, by this government. This policy would have changed the Work Capability Assessment (WCA) to make it harder for people to qualify for a higher rate of universal credit (UC) on the basis of illness or disability.”

Labour announced in their Green Paper published along with Reeves’ statement that the WCA would be scrapped altogether in 2028, and that they would not implement the previous government’s planned changes ahead of that. The Tory government was never likely to be able to implement its WCA plans anyway because they had already been struck down by a High Court ruling.

Labour then attempted to claim that they would effectively be “spending” £1.6 billion—the projected savings had the policy gone ahead—and had therefore lifted 150,000 people out of poverty.

As the Resolution Foundation think-tank pointed out: “Using this phantom policy to offset the scale and impact of actual cuts happening in the real world is akin to suggesting that you should feel better off because your boss had thought about cutting your wages but then decided against it.”

Labour’s attacks on the Personal Independence Payment (PIP) system and on the health top-up in UC will see the ill and disabled people lose out on £7.5 billion by 2029-30, according to Office for Budget Responsibility (OBR)

This will lead to a dramatic rise in the figures, released last week, showing an extra 100,000 children were living below the breadline in the year to April 2024—the final full year of child poverty statistics for the last Conservative government. It is the third year running that child poverty has increased.

Food poverty and hunger also rose, with 300,000 more children in households reliant on food banks over the previous 12 months, and an increase in children in food insecure families—meaning they struggled to afford regular and healthy meals.

More than a quarter of UK children (28 percent) experienced material deprivation, a measure designed to assess whether households are able to afford basics that constitute a minimum acceptable standard of living—such as food, clothes, toys and school trips.

Faced with overwhelming opposition to the sadistic policy, Labour has nonetheless refused to abolish the two-child benefit cap introduced by the Tories in 2017. The cap restricts child universal credit and tax credits allowances to the first two children in a family, unless the children were born before April 2017.

Maintaining the cap will throw more children into poverty. Hitting poorer families disproportionally, in April 2023, the cap affected 422,000 (55 percent) of the 772,000 families with three or more children claiming Universal Credit or Child Tax Credit.

Labour’s general election manifesto promised an “ambitious strategy to reduce child poverty”, alongside a commitment to end “mass dependence” on food banks and charity food handouts, which it called “a moral scar on our society”. In office it has imposed a savage and rapid offensive against the social rights and gains of the working class.

This is just the tip of the iceberg. Just over 370,000 people who currently claim PIP will lose eligibility due to the cuts and another 430,000 who would have been eligible for the benefit in the future will not get it. On average they will lose £4,500 a year.

However, the Resolution Foundation estimates that a single adult, who is now eligible for PIP and incapacity benefits but who no longer qualifies for the payment when they are reassessed could be £9,600 a year worse off. This is because when the work capability assessment is scrapped in 2028, eligibility for the incapacity element will be aligned with PIP eligibility.

Disabled families already experience high levels of poverty, with the annual “households below average income” report showing that almost half (44 percent) of all children living in poverty were living in a household where someone has a disability.

Separate data published by the Department for Work and Pensions (DWP) from its family resources survey found just under a third of households (31 percent) where someone claims PIP disability benefit were food insecure.

The number of children in households that are at risk of or unable to afford enough food is at its highest level since food insecurity measures were introduced in 2020. More broadly, 4.7 million people living in disabled households are experiencing food insecurity. This includes 1.6 million children.

Dr. Philip Goodwin, chief executive officer of the UK Committee for UNICEF, points out that the UK has seen “the highest increase in child poverty of any OECD and EU country in the past decade and today’s [March 27] shocking figures show the situation is getting worse”.

Many of the children living below the poverty line are under five, he noted. “The consequences of poverty can last a lifetime and are especially harmful for babies and young children. Growing up in poverty damages children’s life chances—making them less likely to be school ready at age 5 and increasing their risk of developing health issues like asthma and obesity,” said Goodwin.

The Labour government is targeting even larger budgets for assault in its June Spending Review, including education budgets.

Education Secretary Bridget Phillipson is considering cutting school spending by £500 million and even ending universal free meals for infants, as part of negotiations with the Treasury.

According to the Times, Phillipson also offered to axe funding for free period products in schools as well as dance, music and PE schemes. They were part of a package of measures being put forward by Phillipson as Whitehall departments are instructed to identify cuts of up to 11 percent.

Labour’s lies exposed: Think tank declares the “UK is neither a high wage nor high welfare country”

Robert Stevens

Central to the propaganda of the Starmer Labour government to justify its savage cuts, echoed by a putrid media, is that welfare spending in Britain has surged out of control.

Research by the National Institute for Economic and Social Research (NIESR), based on an assessment of nations within the Organisation for Economic Cooperation and Development (OECD), shatters these myths. The OECD is made up of 38 member countries, including the main capitalist states, with a collective population of 1.38 billion.

UK Living Standards Review 2025 report authored by the National Institute for Economic and Social Research [Photo: National Institute for Economic and Social Research]

The NIESR, established in 1938, is Britain's oldest economic research institute. Its “UK Living Standards Review 2025” published last month found that “The UK has some of the least generous welfare across the OECD: the UK ranks in the middle of OECD countries for welfare spending (as a percent of GDP) and third lowest for welfare value (percent of average wages).”

The report notes, “Welfare has only covered the cost of essentials in two out of the last 14 years: only during the pandemic did welfare cover the costs of essentials due to the £20 per week uplift to Universal Credit.”

The NIESR determines that the “UK is neither a high wage nor high welfare country: the consequence of weak wage growth and cuts in welfare spending have meant that by comparison to other countries the two main sources of living standards in the UK is limited.”

One startling conclusion of the NIESR is that “The poorest households in Slovenia and Malta are now better off than the poorest in the UK: whereas real incomes grew consistently before the 2008 financial crisis, the stagnation afterwards has meant that other countries have overtaken the UK standard of living.”

Examining massive cuts in welfare spending imposed by Conservative Party-led governments from 2010, the study notes, “these focused on reducing the welfare bill and getting claimants into work.” It finds, “The impact of this comparatively large fall in welfare spending as a proportion of GDP on people’s standard of living resulted from a decrease in the generosity of a range of welfare programs. This is most apparent when looking at replacement rates, which measure how much in welfare payments a worker, previously on an average wage, would get if they lost their job as a percentage of their previous wage. Here, the UK ranks one of the lowest amongst OECD countries.”

The UK stood third bottom of the OECD list on this criteria with only Australia (second bottom) and the United States (bottom) below it.

During the initial phase of the pandemic, millions more people were unable to work due to lockdown, resulting in a large increases in the percentage of the working-age population receiving Universal Credit (UC). Between February 2020 and February 2021 the number receiving UC almost doubled, increasing by 3 million to 5.9 million people.

For a single person under 25, the UC allowance in 2019/20 was £251.77 per month. With the £20 a week uplift provided at the time it rose to £342.72 a month. A single person over 25 saw their UC payment rise to £409.89 a month. For a couple with either person aged over 25, UC rose to £594.04 after the uplift.

The NIESR explains that the £20 uplift (£1,040 a year) “resulted in one of the largest increases in the value of welfare, nearly doubling its value in real terms.

This was still a pittance, and a big shock to those thrust into worklessness, but was made necessary to avoid a social explosion.

The withdrawal of the uplift in 2021, notes the NIESR “came at the same time CPIH [Consumer Prices Index including owner occupiers’ housing costs] had already risen above the Bank of England’s 2 per cent target and ended up reaching a peak of nearly 10 per cent in 2022. The resulting effect of the withdrawal of the Covid uplift and rising inflation was that the real value of welfare fell below its pre-Universal Credit level.”

The report details the terrible impact of one of many cuts in welfare payments on millions of working-class people. It notes, “Less than 5 per cent of private rental accommodation across the UK is affordable on housing benefit (down from 20 percent in 2020): freezing the cash value of housing benefit while private rental costs grew at record rates has led to a substantial fall in the areas of the county affordable on housing benefit.”

Some of the stark conclusions of the UK Living Standards Review 2025 report [Photo: Screenshot from NIESR report: UK Living Standards Review 2025]

The situation worsens rapidly. Just days after the NEISR research, a study by homelessness charity Crisis and the campaign group Health Equals found fewer than three in every 100 private rental properties listed in England (2.7 percent) were affordable for people on housing benefit between April and October 2024.

The NIESR presents a picture of generalised wage stagnation among the working-class population. It notes regarding this decline that the “United Kingdom had been experiencing strong and sustained wage growth for decades, averaging 2.4 percent per year (ONS, 2025) between 2000 and 2008. From 2008 onwards, wages have grown by 0.2 percent per year on average. The effect is that a household would be around £10,000 better off had UK wage growth continued in line with its pre-2008 trend.”

The report makes a comparison between Britain and other OECD countries to emphasise the drop in wage levels. “In particular, Norway and Canada started the millennium with broadly similar levels of wages to the UK and grew at a similar rate up until the 2008 financial crisis, after which growth broadly stops in the United Kingdom but continues in these two countries. By 2023, a gap had opened up in the value of wages between the United Kingdom and Norway and Canada.

“New Zealand and Slovenia both started well below the level of UK real wages in 2000, but due to the stagnation in the United Kingdom and strong and persistent wage growth in these two countries, New Zealand overtook UK wages in 2020, with Slovenia set to overtake the United Kingdom within the next few years.”

The report also points to the staggering inequality that exists in Britain, especially apparent in the capital city.

“Inner-London West represents the richest ITL2 region in Europe (which in the UK refer to counties and groups of counties), nearly double the income level of Europe’s second richest region in Germany which includes Munich. While part of the scale of this difference reflects the small geographic area that is Inner London West (therefore encompassing a large proportion of wealthy households) compared with the wider region of Munich and surrounding areas, it also underscores high UK regional inequality.

“Whereas this high-income area covers the majority of German regions, we do not see the same uniformity in the standard of living across the United Kingdom, as it does not extend far beyond London.”

A devastating finding attesting to the level of poverty at the bottom of British society reads: “If we were to rank all 269 European ITL2 regions in terms of income, the poorest German region would rank 82nd (well above the EU average) but the poorest UK region would rank 193rd (well below the EU average). While the wealthiest areas of the United Kingdom are comparable to those in other affluent countries like France and Germany, the poorest UK regions fall below the European average, whereas the poorest regions in those countries are above it. Notably, places like Birmingham [the second largest city in Britain, population 1.1 million] and parts of the North East are poorer than the least affluent areas of Slovenia.”

The NIESR concludes: “This report has shown the stark reality of life in the United Kingdom in 2025. While some enjoy a standard of living comparable to the most prosperous regions of Europe, the poorest are struggling to afford the most basic necessities, like food and heating. The United Kingdom is not a high-wage nor a high-welfare country, leaving millions trapped between low wages and inadequate support.”

The £5 billion in cuts to disability benefits rolled out in Chancellor Rachel Reeves’ Spring Statement and the government’s earlier cuts to pensioners incomes are only a down-payment to fund a vast increase in military spending. The social crisis will get much worse and engulf further millions of people as the Labour government deepens its assault on the welfare state and backs the corporations and local councils in their attack on workers’ jobs, wages and conditions.

South Korean court confirms president Yoon’s impeachment

Ben McGrath

South Korea’s Constitutional Court upheld the impeachment of former President Yoon Suk-yeol on Friday in a unanimous 8-0 decision. The ruling took effect immediately, removing Yoon from office and triggering a special presidential election likely to take place on June 3.

Yoon Suk-yeol speaking during a news conference at the National Assembly in Seoul, March 10, 2022. [AP Photo/Kim Hong-ji]

Acting chief justice Mun Hyeong-bae read the verdict at 11 am, declaring, “The negative effects on the constitutional order and the repercussions from the defendant’s violations of the law are grave, making the benefits of protecting the constitution by dismissing the defendant larger than the national losses from dismissing the president by an overwhelming degree.”

Yoon was impeached on December 14, less than two weeks after he attempted to impose martial law on December 3 in an attempted military-backed coup. The court rejected Yoon’s claims that a national emergency existed that required such a measure. The court also declared that Yoon violated the law by sending troops into the National Assembly, in an attempt to arrest leading lawmakers and block the vote that took place to lift Yoon’s martial law declaration.

Yoon, who did not attend Friday’s court session, and his legal team had falsely claimed that the main opposition Democratic Party’s (DP) control of the National Assembly had “paralyzed the constitutional order” and that the DP was working in league with “pro-North Korean leftist forces.”

After the ruling, Yoon issued a statement, saying that he “apologizes and deeply regrets not living up to expectations.” His party, the ruling People Power Party (PPP), also stated that it “humbly accepts” the court’s decision. As Yoon was president, the PPP enjoys ruling-party status, despite having fewer numbers in parliament. The Democrats claimed the impeachment verdict was a “people’s victory.”

Yoon departs office as a massively unpopular figure, with opinion polls showing that two-thirds of the population supports his removal from office. In addition to the impeachment trial, he also faces criminal charges for insurrection after he was arrested and detained in January. He was released on a technicality on March 8.

The government mobilized a huge number of police, including riot units and SWAT teams, in preparation for the court’s verdict. A total of 20,000 officers were on hand nationwide with 14,000 placed in Seoul near key government offices, including around the Constitutional Court building, near Yoon’s presidential residence in Yongsan, and in Gwanghwamun, where protests typically take place.

Anti-Yoon protesters gathered outside the Constitutional Court Thursday and Friday, where organizers estimated 150,000 people took part. Pro-Yoon demonstrators, who have included far-right and fascistic elements, were much fewer in number, reaching at most about 30,000.

In the face of this massive mobilization of police, it is important to note that mass protests broke out in 2016 and 2017 to denounce the corruption of then-president Park Geun-hye, who was subsequently impeached and removed from office. At the conclusion of her trial, the military developed plans to impose martial law if the mass protests against the government did not subside. Similar plans could be in the works now.

Publicly, the ruling class will now turn its attention to the upcoming presidential election, which will likely be a contest between the Democrats’ leader Lee Jae-myung, the established frontrunner, and a candidate selected by the PPP. Lee narrowly lost the 2022 presidential election to Yoon.

Yoon’s removal from office is not a sign that democracy is alive and well in South Korea or that the political crisis in the country has been resolved. Rather, the Constitutional Court’s unanimous verdict, without even a token dissenting voice in support of Yoon, was a calculated political decision following weeks of delay after the final hearing on February 25.

It was aimed at defusing the growth of broad social anger that found expression in anti-Yoon protests. At their height, as many as two million people gathered at the National Assembly on December 14 to demand the president’s ouster.

The South Korean ruling class feared that Yoon’s return to office would provoke a renewal of mass demonstrations that would grow far beyond the control of the political establishment, in particular that of the Democrats and their allies in the Korean Confederation of Trade Unions (KCTU).

In part popular anger towards Yoon was fueled by memories of South Korea’s past brutal dictatorships. There is also growing anger in the working class, including a developing strike movement, amid persistent declining real wages and stalled economic growth. This year, the Bank of Korea expects the GDP to grow by only 1.5 percent. It grew just 2 percent in 2024 and 1.4 percent in 2023.

The election of Trump as US president further complicated matters for the South Korean bourgeoisie, which is concerned that Trump’s trade war measures will worsen conditions for the export-oriented economy and deepen social discontent. Just this week, Washington imposed 25 percent tariffs on all exports from South Korea.

Fearing a social explosion, the Democrats did everything in their power to demobilize the mass protests that broke out in December and to block strikes by workers with the aid of the KCTU. Their primary concern was to prevent the development of any significant social movement that put forward demands that went beyond the removal of Yoon and targeted the capitalist system itself.

Instead, the Democrats worked to present Yoon’s removal from office as a done deal following his initial impeachment. They could not have foreseen the outcome of the impeachment trial, setting up a situation in which Yoon could have returned to office and potentially declared martial law again.

In doing so, the Democrats provided Yoon, the PPP, and their fascistic supporters with breathing room, and facilitated the development of the far-right pro-Yoon protests. While dwarfed by the anti-Yoon movement and lacking any broad support, these fascistic elements were given the space to stage rallies and threaten their political opponents with violence.

The threat of dictatorship has not passed. At present, South Korean ruling class may not yet be ready to dispense with bourgeois democracy, believing it to be preferable to martial law for imposing its agenda of austerity measures and forcing the working class to foot the bill for the crisis of capitalism.

However, as the economic and political crisis worsens, it is to these fascistic elements that the political establishment will turn if it decides imposing martial law or another form of dictatorship is necessary. This is already taking place around the world as the ruling classes in other countries shift further and further to the right, exemplified most clearly by the fascist Trump regime in the US.

International students face severe housing stress in Australia

Aditya Syed

Students at the University of Adelaide [Photo: University of Adelaide]

A recent academic survey has revealed that “hot-bedding”—the practice of tenants sharing a bed in shifts to reduce rental costs—is becoming more common in Australia. 

Immigrants and international students are the most likely to live in accommodation where multiple people share one bedroom or even one bed, due to unaffordable rents and the worsening cost of living. This often leads to a level of overcrowding that damages the physical and mental health of the students forced into these conditions. 

The survey was published last November by Dr. Zahra Nasreen, a researcher at the University of Sydney and Macquarie University, and included responses from 103 students. All the students surveyed shared their bedroom with strangers to ease rent costs.

The majority of respondents were international students with lower income. Of this sample, 17 percent shared their bedroom with three or more other people, while 18 percent reported that the living room in their accommodation was partitioned into one or more “bedrooms.” The most extreme case was a Nepalese international student who had been one of 20 people living in a single two-bedroom apartment. 

According to the survey, 46 percent of respondents were renting without a written lease, and 37 percent were paying rent in cash, a situation which would leave no record of their tenancy, giving them no legal options to counteract attempts by landlords to violate stated agreements, such as refusing to return deposits. 

Dr. Nasreen explained that these students understand their weak position in the rental market. They “lowered their housing expectations and settled for shared room situations that might not meet their everyday basic needs and can lead to health and safety risks,” she wrote.

Several surveyed students gave interviews that painted a vivid picture of the degrading conditions they face. Some reported not being allowed to cook, in order to prevent false fire-alarm penalties for the landlord or “head-tenant,” or being barred from using the heaters or air conditioners, for the landlord to save money on utility bills. One described the rules enforced in their accommodation, a two-bedroom apartment used by seven people: “[Y]ou’re not allowed to use the living room, you’re not allowed to talk loudly or laugh, even between phone calls or with the flatmates...” 

Tenants in these overcrowded conditions, the survey continued, reported sleepless nights, filth and social friction between themselves and fellow roommates, all strangers with their own schedules and needs. This increased the likelihood of physical disease and mental illness, negatively impacting the students’ employment and education.

Measures including hot-bedding, skipping meals and tolerating abusive landlords are all desperate responses to an increasingly unaffordable rental market.

In Sydney, the weekly rent of a one-bedroom apartment can range from $300 to $700, as of September 2024. The cost of living has increased staggeringly in the last five years: the Australian Bureau of Statistics shows the Consumer Price Index (CPI), a measure of household expenses, rose by 2.8 percent from September 2023 to September 2024, and has risen consistently since mid-2020, with a peak annual increase of around 7 percent in 2022. 

However, these CPI increases and the official inflation rate are an under-representation of the actual increases in costs of daily utilities, food items and rent. 

The Labor government of Prime Minister Anthony Albanese, since taking office in 2022, has backed multiple increases in mortgage interest rates, translating to higher rent prices for tenants. This is just one element of an historic assault on the social conditions of the working class and youth by Labor, including education and health, the steepest cuts since the 1930s.

Successive Australian federal governments, led by both Labor and the Liberal-National Coalition, have enacted pro-business policies that are accelerating the cost-of-living crisis. They have slashed social services as well as funding for universities, leaving universities to shift their financial losses onto international students and charge them exorbitant fees.

It was the Labor Party government in the 1980s, under Prime Minister Bob Hawke, that began the abolition of free higher education, beginning with fees for international students in 1989, as well as a broad pro-corporate assault on the social conditions of the working class.

Rental prices increased sharply across Australia between 2023 and 2024, including by 12 percent in Victoria and even 30 percent in parts of Brisbane. Over the last five years, rents have risen by over 50 percent, while wages are stagnant and declining in real terms.

An earlier survey, conducted in 2019 by researchers from the University of Technology Sydney, investigated housing stress among international students. It found that 3 percent of survey participants practiced hot-bedding. Extrapolated to the entire international student population in Australia, this amounts to over 20,000 students hot-bedding at that time. About a quarter of respondents lived in houses with at least two people per bedroom.

As the study stated, “hot-bedding is indicative of extreme financial stress.” About 22 percent of respondents deprived themselves of food and utilities to pay rent, while 57 percent had a total income of under $500 per week.

International students were among the most vulnerable layers affected by lockdowns during the initial outbreak of COVID-19. From the 2019 survey participants, 852 answered a follow-up survey in mid-2020. Of those who were employed, 61 percent lost their jobs. The proportion of those who skipped meals to afford rent ballooned from 22 to 33 percent. International students were also ineligible for any financial assistance from the government, leaving them to face this social crisis alone. 

Five years since the 2019 survey, the financial stress that underlies the resort to hot-bedding has significantly worsened. International students, who pay exorbitant fees and cannot access state financial aid, are viewed as cash-cows by the entire Australian political establishment and the universities, which are run as highly profitable businesses.

The Labor government is attacking public education and housing because it is a party of Australian capitalism, intimately connected to big business and property developers and advancing their profit interests. 

This has also been demonstrated in Labor’s drive to demolish public housing. The Victorian state Labor government is setting out to demolish 44 public housing towers across Melbourne, displacing up to 10,000 residents, and replacing them largely with private apartments. This is being done on the totally false pretext that the towers are unfit for habitation and there is no cost-effective way to refurbish them. 

Whatever fraudulent claims Labor has made to be alleviating the housing crisis for ordinary people, their actions have been aimed at extracting more wealth from the population for the benefit of the ultra-wealthy, and expanding military spending as the Australian ruling elite prepares for a US-led conflict against China in the Indo-Pacific.

China announces retaliation against Trump’s “reciprocal tariffs”

Nick Beams

The Port of Shanghai, May 2013, [Photo by Bruno Corpet / CC BY-SA 3.0]

China has retaliated against the Trump administration’s imposition of a 34 percent “reciprocal tariff” by announcing a 34 percent tariff to be imposed on all American imports on April 10.

It has also taken other measures against the US, including an investigation into a Chinese subsidiary of the US chemical giant DuPont, further restrictions on the export of rare earths, and adding more US companies to its “entities list,” which prohibits Chinese companies from supplying them with components.

The blanket tariff on all US goods was previously considered a worst-case option, but the level of the attack was such that Beijing decided to go ahead with it.

A statement by the Chinese Commerce Ministry denounced the US action as a “typical unilateral bullying move.” It said that the US tariffs did “not comply with the rules of international trade” and seriously damaged “the legitimate rights and interests of China.”

Together with the 20 percent tariff hike announced before Trump’s so-called “liberation day” last Wednesday, the total increase in tariffs in the latest round comes to 54 percent.

But according to the Peterson Institute of International Economics, it is even higher than that. When combined with previous tariff measures, the rate comes to 76 percent—well above the 60 percent that Trump had previously threatened.

Trump responded to the Chinese action with a message on his social media that contained an implicit warning of further US action against it.

“China played it wrong,” he said. “They panicked—the one thing they cannot afford to do.”

This message needs to be read in the light of a statement in the fact sheet that accompanied the executive order announcing the tariff hikes.

It said the order, issued on the grounds of a “national security” threat, contained a “modification authority, allowing President Trump to increase the tariff if trading partners retaliate.”

The official “justification” for the “reciprocal tariffs” is that they are to compensate for non-tariff measures carried out by countries, such as taxes, regulations and biosecurity measures, deemed to be a non-market barrier to US goods.

The level of the tariff was determined in a back-of-the-envelope calculation. The trade deficit of the US with the given country was divided by the total of its exports in order to arrive at a percentage that was then halved to arrive at the “reciprocal tariff” number.

This has resulted in enormous tariff hikes for a number of Southeast Asian countries that have become significant manufacturing centers supplying the American market.

The hardest hit is Vietnam, for which the “reciprocal tariff” will be 46 percent. The tariff hit against Taiwan is 32 percent, with Thailand coming in at 37 percent.

These tariffs will have a major impact on the economies of the region, possibly pushing some of them into recession.

Whether by accident, the result of a cooked-up formula or design (the most likely explanation), they are indirectly aimed at China. Following the tariff measures directed at China in the first Trump administration, many companies, Chinese and American, among them, moved their operations to Southeast Asia to dodge the tariff hit. That road has now been closed.

There are now multiple warnings in the financial press and in business circles that the world is being plunged into an all-out trade war, akin to and possibly even more damaging than that of the 1930s, which played a crucial role in intensifying the Great Depression.

“This is increasingly looking like a full-blown trade war,” Guy Miller, chief market strategist at the major Swiss insurer, told the Financial Times, warning that Trump’s “misguided economic policy” had not previously been priced in by the market.

He was referring to the widely held belief that the measures would not be as severe as they were and that, in any case, they would be merely “transactional,” aimed at securing concessions within the existing regime rather than completely smashing it.

In an editorial yesterday, the FT said Trump’s decision in April would go down as “one of the greatest acts of self-harm in American history.” The “reciprocal tariffs,” it said, would “wreak untold damage on households, businesses, and financial markets across the world, upending a global economic order that America benefited from and helped to create.”

But such warnings about the effect of his measures will have no impact on Trump, for he has constructed an alternative narrative according to which the Great Depression would not have occurred had the tariffs of the era of President William McKinley been maintained and the post-war regime of liberal trade did not benefit the US but damaged it.

In another social media post directed to the “many investors” coming into the US with “massive amounts of money,” he said that “my policies will never change. This is a great time to get rich, richer than before.”

This sentiment does not seem to be shared in financial markets. Yesterday, Wall Street fell sharply again. In the two days since the tariff announcements, market capitalization has fallen by $6.6 trillion, with high-tech stocks entering bear market territory with falls greater than 20 percent.

The effects are already showing up in the real economy, with numbers of firms announcing layoffs because of the tariff hikes and the growing uncertainty.

Forecasts for US growth are being revised down. JP Morgan has slashed its forecast for growth in the US economy from a 1.3 percent year-on-year growth in the fourth quarter to a 0.3 percent contraction. It said the unemployment rate would rise to 5.3 percent.

Citigroup has cut its forecast for growth from 0.6 percent to 0.1 percent.

The massive hit on China will have ramifications around the world, not least of all in Europe, which is already under the hammer because of the 20 percent “reciprocal tariff” and the 25 percent levy on imported cars into the US.

In response, the European Union is preparing tariff measures against Chinese goods, which it considers will come into the market after being excluded from the US.

Deutsche Bank chief Germany economist Robin Winkler said the immediate trade shock to Asia would probably reverberate back to Europe, as Chinese manufacturers would try to sell more of their products as they face “a formidable tariff wall in the US.”

According to a senior US diplomat, cited by the FT:

We will have to take safeguard measures for more of our industries. We are very concerned this will be another point of tension with China.

One of the measures being considered is to raise the tariff on Chinese electric vehicles, now at 35 percent, even higher.

Such a response—step up the tariff war—is highly politically significant. It demonstrates that the crisis into which the world economy is being plunged is not the outcome of Trump’s irrationality. Tariff wars arise out of the fundamental contradiction of the world economy, that between globalized production and the nation-state system for which the ruling classes of every country have no answer other than a deepening war of each against all.