My friend, mercantilism is like the oldest trick in economic warfare.

Yes, but for your merchants, not your greatest enemy's!

First of all, you need to understand that the only reason we have cheap goods today is because the world has a surplus of industrial capacity. If the world’s demand is larger than the supply of goods, then prices will rise globally, and Western countries would not enjoy cheap goods at all [excerpted to avoid wall of text] The end result is that we have an oversupply of cheap goods, where the excess is absorbed by the US running a permanent trade deficit.

Agreed on all counts, uncontroversial among Marxists (hopefully).

It will mean prices increasing and American consumers purchase less goods. The share of global consumption suddenly shrinks, we now have an even more over-supply of goods against a shrinking share of consumers. Most importantly, it shuts Chinese exporters out of the American consumer market. As a result, China has to dump their cheap goods elsewhere or else their manufacturing sector will go into slump, and unemployment will rise. This is also a very bad timing for China because of the recent pandemic, and the property market imploding also means many people are less likely to spend as their savings dwindle.

They seem to be pulling this off successfully without much issue given their increase in external trade and internal consumption (I know it's not as fast as you want but it is faster than basically anywhere else in the world).

So somebody else has to buy China’s huge surplus of goods. Naturally, they dump the goods into Europe, which will kill off the European domestic industries because they simply cannot compete with the cheap and perhaps even superior Chinese goods, if they don’t also put up tariffs like the Americans. This is why the EU put up tariffs against Chinese EV last year as soon as Biden did so.

On the other hand, if they refuse Chinese goods, they will also run into problems with importing critical materials for their own industries. The rare earth export restriction was just such a reminder to them. But worse of all, reduced Chinese imports from the EU means a surplus of export goods that cannot be sold elsewhere, and the European factories will have to close down and layoff their workers, leading to a recession.

This is why EU has no choice but to fold, especially with their energy prices jacked up after the Nord Stream bombing.

But in what way was the destruction of Europe help the health of the empire in the long run? Obviously American capitalists are all about it in the short term, but it weakens the overall position of the empire relative to China, which is far more significant geopolitically.

And this is why Trump’s tariff is a financial warfare, where failing businesses prime them to be harvested by the American finance capital. If this situation is not resolved in some ways, we could be looking at mass IMF bailouts in the Global South at a scale not seen before.

But China is establishing alternative financial systems to the IMF and World Bank. The PRC and BRICS bank are increasingly more important to the financial backing of the third world while the imperialist financial systems continue to lose their group. The intraimperial cannibalism of US capitalists consuming Europe's industrial capital will only further degrade the ability of the US to impose those conditions on the global south.

This is my whole point . Sure there's some upsides to some segments of the US financial class, but both the financial and industrial economy globally are shifting further and further away from US control, and all these efforts to tighten the grip only cause more countries to squeeze out and go to China/BRICS. This is not to say everything is resolved and imperialism is defeated. China has to settle the internal class conflict that's producing various economic crises within the country, but those pale in comparison to the financial crises that run through every single facet of American life because the power of the capitalist class is unchecked to an extent that even the most powerful and corrupt Chinese capitalists would struggle to conceive. BRICS has the fundamental flaw of India, who constantly straddles the imperialist and anti-imperialist worlds in pursuit of its own objectives, but more and more global industry, finance, and raw population continue to enter the BRICS sphere while the imperial sphere shrinks continuously. China remains incredibly cautious on the global stage, and I think we all agree that they can and should take more strident anti-imperialist action. But the BRI and other initiatives have very meaningfully decentered the imperial core in the economic world of the global south. And of course, until the empire is truly defeated, it will continue to wreak terrible havoc on whatever country it can prey on - but that list of countries keeps shrinking.

It is going to be a messy, bloody path to the collpase of imperialism. The trends could reverse and the US could find a way to reassert itself and force the rest of the world to buckle. But it seems like all it can really manage is to consume the working classes of the imperial core to its own long term detriment and commit unspeakable crimes in West Asia. Meanwhile, China slowly - too slowly, yes - is building the alternative economic order that is one of several necessary preconditions for the eventual victory of global socialism.

There is no re-industrialization, despite what Trump says!

Of course, I've said as much in this thread.