It was inevitable that America’s unipolar moment would come to an end. By the first decade of the 21st century, the real material foundations of postwar US prosperity had eroded significantly. The financial crash of 2008 was a watershed moment that shook American and global capitalism to its foundations, while the state response to the collapse, and to the period of economic malaise that followed, shattered the neoliberal “Washington Consensus.” The crisis boosted the fortunes of economic nationalism and protectionism within the US and (partly in response) within Europe, where significant sections of the ruling classes are now openly questioning their continued participation in a collapsing US-led order.
The global “war on terror” had been intended to secure the fortunes of American capitalism by controlling the energy resources of the Middle East. Its costly failure diminished the credibility of the US and contributed to a resurgent Russia and powerful China asserting their role as counterweights on the world stage, which has in turn bolstered protectionism, militarism and even naked colonialist rhetoric by the US. The global order has returned once again to multipolarity and is increasingly being reshaped by pressures towards the “nationalization of capitalist interests” that led to the world wars of the 20th century. Imperialism is undergoing a factory reset, restoring its default setting of a tendency towards great-power rivalry and war.
When the global financial crisis broke out in 2008, there was initial widespread concern among world leaders that countries would, in the words of neoliberal house journal the Economist (23 June 2010), opt to “return to the dark days of Smoot–Hawley, punitive tariffs” and other protectionist barriers in a repeat of the Great Depression of the 1930s. Yet the leaders of the advanced capitalist countries resisted raising tariff barriers, and the G20 issued a statement in November 2008 declaring: “We underscore the critical importance of rejecting protectionism and not turning inward in times of financial uncertainty.” Global trade receded during the crisis but started to recover in the 2010s.
Yet global trade as a share of GDP fell, as a massively expanding China was now “prioritizing domestic consumption while remaining open to international trade and investment” (IMF, “Growing Threats to Global Trade,” June 2023). Under Hu Jintao until 2013 and even more so under his successor, Xi Jinping, China shifted away from the market reforms of the preceding decades, strengthening its state sector and government control of domestic and foreign capital:
“The first indication of this shift came in 2004, when prominent intellectuals of what has become known as the ’Chinese New Left’ exposed the massive squandering of public assets that accompanied the privatization of several prominent state-owned companies. In November of that year, the government halted management buyouts of SOEs—the main mechanism for privatization—while the State-owned Assets Supervision and Administration Commission (SASAC, established in 2003 to manage the SOEs) implemented measures to maximize the value of state holdings and prevent asset stripping. The privatization of large SOEs has since stalled. Foreign ownership of steel companies was prohibited and a number of small private mines (where a spate of deadly accidents had taken place) were abruptly renationalized.…
“In 2006–07, the CCP imposed new regulations on foreign capital, increased scrutiny of foreign-backed mergers and introduced further restrictions on banking, retailing and manufacturing. These measures, aimed at aiding domestic companies and slowing the growth of poverty and inequality, led Myron Brilliant (vice president for Asia at the United States Chamber of Commerce) to complain: ’It’s not only a threat to foreign investors but it also undermines China’s transition to a market-based economy’ (New York Times, 16 November 2007).”
—“Whither China?” 1917 No.31
China’s state-led economic expansion, combined with anemic growth rates in Western imperialist countries in the 2010s, contributed to the emergence of a post-neoliberal shift towards protectionism: “Western governments were becoming increasingly concerned that competition with China was ’unfair,’ given its use of subsidies as well as restrictions imposed on companies seeking access to its market. This spurred demands for more confrontational policies toward China, especially because it was no longer a poor developing economy” (IMF, “Growing Threats to Global Trade,” June 2023).
In Europe, a significant blow to the free-trade “consensus” came when a majority of beleaguered British voters opted to leave the EU and its common market in a referendum in 2016. Brexit came as a shock to the neoliberal establishment and reshaped the political landscape of Britain. The same year saw the election of Donald Trump to his first term as US president, which led to a US–China tariff war in 2018. In the background, there had already been a substantial increase in non-tariff protectionist barriers. The Covid-19 pandemic of 2020 and Russia’s invasion of Ukraine in 2022 contributed to growing concerns about the vulnerability of national economies to highly integrated supply chains and to the increased use of tariffs as geopolitical weapons.
The data for US tariffs presented above in Figure 1 show a steady decline from 1930 (44.9 percent) to 2008 (4.0 percent—the lowest on record). Beginning in 2009, however, the trend began to reverse, climbing to a high of 8.9 percent in 2021 before dipping to 7.5 percent in 2024 (US International Trade Commission, February 2025). After assuming office for the second time in January 2025, Trump launched a trade war with America’s erstwhile allies in Europe, Canada and beyond, massively increasing the use of tariffs and accelerating a general move towards protectionist barriers.
Although the American ruling class remains divided on this matter and the “Liberation Day” tariffs announced in April 2025 have met with internal obstacles within the US, the shift away from free trade is historically significant. When the US Supreme Court ruled that the legal framework Trump had been using to implement his tariffs was unlawful, the administration simply switched its legal rationale, re-imposing tariffs that apply to an estimated one-third of annual imports. The average dutiable tariff rate for the US jumped to 19.9 percent in 2025—the highest since 1947 (calculated with USITC DataWeb data).
In their article, “Global trade’s rollercoaster ride” (11 December 2025), World Bank economists M. Ayhan Kose and Alen Mulabdic note the global spread of these measures:
“A decade-long accumulation of restrictions has been supercharged by sharp tariff hikes and retaliatory measures among major economies in recent months. As a result, both tariffs and uncertainty remain far above historical norms. According to Global Trade Alert, the number of new trade restrictions reached record highs during 2023–25, reversing decades of gradual liberalisation.
“In the first ten months of 2025 alone, more than 2,500 trade restrictions were imposed worldwide—almost five times as many as during the same period in 2015.… Although some of these measures have since been rolled back and new negotiations are underway, businesses continue to navigate choppy waters marked by heightened policy uncertainty, stretched supply chains, and the ever-present threat of additional barriers.”
An October 2025 IMF working paper, “Measuring Global Trade Policy Activity,” documents what it calls a “structural shift” in the use of trade policy internationally: “Global trade policy is changing rapidly, with economies adopting various tariff and non-tariff measures that can significantly affect global trade and economic growth.”
The state has always played a central role in the development of capitalism, but the guiding principles of Pax Americana had at least theoretically excluded the sort of massive government intervention to prop up banks and other corporations that took place in the US and other imperialist countries in the wake of the 2008 financial crisis. The weak economic growth which followed for the imperialist “core” countries, and which persists to this day, has only encouraged greater reliance on the state to shore up finance capital. It is notable that this was matched by the leading role played by the state in the two countries, China and Russia, that emerged as global powers in the first decade of the 21st century.
In the case of the US, increased reliance on the state to protect and subsidize domestic corporations has not led to economic recovery but to ballooning public debt. US public debt rose steadily in the post-Bretton Woods era, but the 2008 crisis opened the floodgates. Total US federal public debt rose from $9.4 trillion in 2008 to $38.5 trillion at the end of 2025 (see Figure 3), owing to the wars in Iraq and Afghanistan (and other operations in Syria, Libya and elsewhere), the financial crash, corporate tax cuts and huge infusions of bailout money for the American oligarchy.
Figure 3: Total US federal government debt, historical trend
From 1971 to 2008, growing US public debt was accompanied by an increasing share of Treasury securities held by foreigners. Figure 4, reproduced from the US Congressional Research Service, shows the percentage of foreign holdings of US Treasury securities since the end of WWII. Notwithstanding the slight decline in the 1980s and early 1990s, the general trend from the demise of Bretton Woods to the financial crisis of 2008 was one of significant increase—from 8.3 percent the year before the Nixon Shock (1970) to 56.5 percent in 2008. Since 2008, however, the reverse appears to be true. As public debt skyrocketed, foreign ownership of Treasury securities as a percentage of total ownership declined to 30.2 percent in 2024.
Figure 4: Foreign and domestic holdings of Treasury securities (1945–2024)
It appears that an increasingly stagnant and indebted US is less and less able to rely on foreigners to finance its debt. While reports of actual de-dollarization, like Mark Twain’s death, have been greatly exaggerated, the dollar system is under extreme pressure even as no real alternative has emerged. Over the past quarter century, the percentage of global foreign exchange reserves held in US dollars has declined from approximately 71 percent to 59 percent. American technocrats openly worry that if there were a sudden move towards greater diversification, the US economy could fall into a downward spiral: “A weaker dollar would likely mean inflation, higher borrowing costs, and reduced geopolitical leverage. At the extreme, losing reserve status could force the U.S. to balance trade more strictly—consuming less than it produces—a structural adjustment that would be painful” (Independent Institute, “Unpacking The ’Petrodollar War Theory’,” 27 February 2026).
Beginning in the late 1970s, during the era of Western-driven globalization, China opened itself up to foreign capital penetration. In a process similar to that which occurred in the earliest stage of industrialization in Germany, foreign industrial capital was invited to set up shop, introducing advanced mass production techniques and cutting-edge technology. Yet there was from the beginning a fundamental difference between late 19th century Germany and late 20th century China: the class nature of the state. Whereas the German capitalist state fused with (or was consumed by) the monopoly capital it nurtured, the Chinese deformed workers’ state that issued from the 1949 revolution dominated the capital it incubated. In China, the state has played and continues to play a leading role in economic development, and its control over private capital has allowed China to make maximal use of foreign investments to create its own world-class monopolies. In a bizarre twist of history, the Chinese deformed workers’ state has grown to become a key prop of the global capitalist order.
In 2025, global GDP stood at approximately US $117 trillion. Figure 5 shows the relative position of all national economies with a GDP of $1 trillion or more, giving some idea of the weight of these countries within the world economy. The US ($30.6 trillion) led the pack and accounted for more than one-quarter of the total while China ($19.4 trillion) was in second place, representing about one-sixth. Together, the top 10 countries (the G7, China, Russia and India) account for around two-thirds of global GDP.
Figure 5: GDP (current prices, USD trillions), top countries, 2025 (Source: IMF)
Approximately 28 percent of the world’s manufacturing (valued at $4.7 trillion in 2023) is now located in China, accounting for more than the US, Japan and Germany combined. According to the US-based Center for Strategic and International Studies (CSIS) (25 November 2025):
“Chinese manufacturers have shifted from producing cheap, low-value-added goods to producing more sophisticated products. In 1995, clothing and other textiles accounted for 20 percent of China’s total exports while electronics amounted to less than 9 percent. By 2020, that picture was flipped: electronics accounted for 24 percent of China’s exports and textiles were just 10 percent.
“This process, often referred to as climbing the value chain, requires capital investment and technical know-how to build and operate upgraded manufacturing facilities. In previous generations of industrial planning, Chinese manufacturers absorbed these production factors from foreign firms, leading to frustrations about technology transfer that fueled trade tensions in the 2010s. In some areas, however, Chinese technology leaders have now caught up to—or surpassed—their international competitors, necessitating a greater reliance on domestic innovation.”
Chinese manufacturers are able to compete in high-tech industries, and they are playing an increasingly important role in key areas such as electric vehicles and lithium-ion batteries. CSIS notes that “China’s rapid emergence in these areas has disrupted markets, leading to protectionist countermeasures, including the U.S. and EU imposition of tariffs on Chinese electric vehicles.” Along with its larger American competitor, China leads the world in the development and application of AI and robotics technologies. The Guardian (18 February 2026) reports:
“By the end of 2024, China had registered 451,700 smart robotics companies, with a total capital of 6.44tn yuan (approximately $932.16bn), according to state data. Major government projects such as Made in China 2025 and the 14th Five-Year Plan, have made robotics and AI key Beijing priorities.
“Morgan Stanley projects that China’s humanoid sales will more than double to 28,000 units in 2026; and Elon Musk has said he expects his biggest competitor to be Chinese companies as he pivots Tesla toward a focus on embodied AI and its flagship humanoid Optimus. ’People outside China underestimate China, but China is an ass-kicker next level,’ Musk said last month.”
China is now the top trading partner for more than 120 countries, including Japan, the EU states, South Africa and Russia. It has become the largest commodity exporter in the world, accounting for 14.6 percent of global exports with its $3.6 trillion worth of merchandise in 2024 (WTO, “Global Trade Outlook and Statistics,” 2024). By comparison, the US accounts for 8.4 percent of global exports, with $2.1 trillion. While it remains deeply connected to the US economy, Germany (the world’s third largest importer and exporter) is increasingly dependent on China not only for cheap consumer goods but also high-tech products, and China has become a major importer of German commodities. In 2025, Germany imported more than 170 billion euros worth of goods from China, which in turn imported more than 81 billion euros worth of goods from Germany (China International Import Expo Bureau, 24 February 2026).
As China opened itself up to foreign investment in the 1980s and 1990s, an increasing percentage of its exports was made by Foreign-Invested Enterprises (FIEs) operating within the country. A growing number of American, British and other foreign companies set up shop or invested in China due to its cheap labor pool and easy access to raw materials, pushing up the share of total Chinese exports accounted for by FIEs from 1.9 percent in 1986 to 58.2 percent in 2006. The trend, however, has since reversed, with the figure declining to 28.6 percent in 2023 (Ministry of Commerce of the People’s Republic of China, “Statistical Bulletin of FDI in China, 2024”). In other words, over the past two decades an increasing majority of Chinese exports has come from wholly Chinese-owned private companies and state-owned enterprises rather than imperialist corporations operating inside China, indicating its growing status as an independent force.
China now plays a highly significant role not only in trade but in capital export. In 2025, China’s outward direct investment (ODI) exceeded $174 billion, spanning the globe. Its accumulated ODI figure is more than $3.1 trillion: “In total, 34,000 Chinese investors had established 52,000 overseas enterprises in 190 countries and regions, including 19,000 in Belt and Road partner countries. About 70 percent of these enterprises were profitable or breaking even. Reinvested earnings reached $77.89 billion, accounting for 40.5 percent of total flows” (China Daily, 10 September 2025).
Much of Chinese ODI first makes a stop in Hong Kong before redirecting elsewhere, which is why 61 percent of the total figure appears to go to the region. China is heavily investing in Association of Southeast Asian Nations countries, Africa and Central Asia as part of its sprawling Belt and Road Initiative (BRI), which was launched in 2013. While the BRI includes significant infrastructure projects designed to facilitate the transportation of oil and natural gas, it is increasingly taking the form of a “Green Silk Road” and “Digital Silk Road” as China pursues investments in renewable energy and telecommunications networks: “[T]his shift is a strategic response to trade barriers in Western markets, as China seeks to consolidate its presence in Southeast Asia, Central Asia, and Africa. This evolution reflects a move away from ’trophy projects’ toward investments that offer clear economic returns and strategic depth” (Observatorio Global UDLAP, 20 February 2026).
As part of the BRI, China has made enormous investments in the Middle East. The New York Times (9 March 2026) reports that Chinese investment in the region “is growing faster there than anywhere else in the world,” with the country having invested $89 billion between 2019 and 2024. These investments include major infrastructure projects across several countries. Chinese investment in the six Gulf Cooperation Council (GCC) countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) has ballooned:
“In less than two decades, the relationship between the People’s Republic of China and GCC nations has transformed from a peripheral connection based on simple energy transactions into a deep, multi-faceted partnership encompassing billions of dollars in investment, complex infrastructure projects, and strategic political dialogue. Between 2005 and 2024, bilateral trade volume surged by over 750% to exceed $326 billion, while Chinese foreign direct investment (FDI) into the region reached over $128 billion. The launch of China’s Belt and Road Initiative (BRI) in 2013 served as a powerful catalyst, forging a partnership that is reshaping trans-Asian trade and investment flows.”
—“The Foreign Direct Investment and Trade Connection Between China and the Gulf Cooperation Council Countries,” Alternatives, October 2025
By 2023, China had $8.2 billion in investments in Saudi Arabia, $9 billion in the UAE and $34 billion in Iraq, mainly in the energy sector, where Chinese companies owned four times as many shares as US companies.
Prior to launching the Iran War, Washington was growing concerned about competition from China in the Middle East. In October 2023, the Heritage Foundation—a conservative think-tank close to the Trump administration—warned that “[s]urrendering the region to China would create significant strategic costs for the United States”:
“U.S. dominance in the region is not guaranteed. If the U.S. pushes its Gulf allies away, these countries will find new friends. In a world that pits the United States against China, Gulf allies are invaluable because the region determines the health of global energy and trade and is home to vital U.S. military assets and bases.”
Chinese investments in Iran are somewhat opaque. Ironically, historic US sanctions on Iran probably increased Chinese investment in the country, which was forced to develop “an oil-for-infrastructure arrangement involving Chinese state-owned enterprise Sinosure that may have secretly facilitated up to $8.4 billion worth of investment in 2024” (“China-Iran Fact Sheet: A Short Primer on the Relationship,” US-China Economic and Security Review Commission, 16 March 2026). Sanctions have also made it difficult to know exactly how much oil China imports from Iran, since much of it is relabelled as Malaysian following ship-to-ship transfers at sea, although one estimate put it at 1.38 million bpd in 2025, i.e., about 12 percent of China’s oil imports (Center on Global Energy Policy, 29 January 2026).
China has pledged to invest an astounding $400 billion in Iran over the next two decades. As part of the BRI, China completed a direct railway line to Iran in 2025, offering an overland alternative taking less than half the time of transit by sea. The project is connected to larger transit corridor projects to link China, Central Asia, South Asia, Russia, Africa and Western Europe via Iran and Turkey, bypassing the India–Middle East–Europe Corridor (IMEC)—a US-backed project “aimed at turning Israel into a strategic hub for commercial and energy flows in Western Asia” (SpecialEurasia, 9 June 2025). As Pepe Escobar notes: “IMEC has so far been little more than a major PR operation launched at a G20 summit in New Delhi. It should be interpreted as the collective west’s late response to the BRI: yet another American project to ’contain’ China and, more recently, Iran as a member of the [Russia–Iran–India International North South Transportation Corridor]” (The Cradle, 20 April 2026). It is intended “to bypass the top three vectors of genuine Eurasian integration: BRICS members China, Russia, and Iran.”
In early April 2026, Israel and the US bombed Iranian railway lines and rail bridges, with the IDF claiming that the infrastructure was being “used by the Iranian terror regime to transport weapons and military equipment” (Times of Israel, 7 April 2026). Washington views the new overland transit corridors as a major challenge to the maritime traffic routes it has dominated for decades, as Beijing seeks to bypass US naval power projection in strategically sensitive areas, e.g., the Strait of Malacca. At the same time, Washington’s failure to prevent Iran from closing the Strait of Hormuz—the narrow sea lane passing through Iranian and Omani territorial waters that is used to ship 20 percent of the world’s oil supply, along with other vital exports like LNG, helium and urea (used for fertilizers)—to US-aligned countries provided an “emperor’s no clothes” moment for America’s pretensions to naval supremacy over sea lanes.
Western intellectuals and even leftists have described Chinese investments abroad as an example of “imperialism,” particularly when it comes to Africa, where, under Chinese guidance, governments have set up Special Economic Zones of loosened regulations designed to attract foreign investment. However, about three-quarters of all Chinese investment in Africa comes from state-owned enterprises. Much of the investment is in infrastructure projects, including in the Kenyan port city of Mombasa and the port of Djibouti in the Gulf of Aden. In themselves, infrastructure investments are not an unusual form of capital export. Imperialist countries will often fund infrastructure projects in order to reduce the greenfield costs to investors interested in cheap African resources and labor but concerned about inadequate transportation, communications and utilities networks. What is unusual about Chinese capital exports, however, is the vast scale of infrastructure investments of dubious relation to profitability, the provision of huge loans at unusually low interest rates and the fact that the pattern of Chinese investments doesn’t map on to any pattern of expected returns. According to London School of Economics academic Shirley Ze Yu, the bulk of Chinese investment is subordinated to a singular goal of securing political alliances with African governments and other forms of “geopolitical risk hedging” (blogs.lse.ac.uk, 4 November 2022). Precisely because China is not a capitalist state, the gargantuan international extension of state-owned enterprises and even China-based capitalism has largely lacked the predatory character of imperialist penetration, though workers are of course exploited in any profit-making venture.
China is viewed as a major competitor and geostrategic threat by Washington. The US Department of War’s “unclassified” 2026 National Security Strategy explains that “China is already the second most powerful country in the world—behind only the United States—and the most powerful state relative to us since the 19th century. And, while China faces very significant internal economic, demographic, and societal challenges, the fact is that its power is growing.” The strategy document frets about China’s military build-up because “the Indo-Pacific will soon make up more than half of the global economy,” and if China were to dominate this sphere of influence, “it would be able to effectively veto Americans’ access to the world’s economic center of gravity, with enduring implications for our nation’s economic prospects, including our ability to reindustrialize.”
China has clearly put itself in a structural position to seriously threaten the US system’s global architecture in the event of a war or blockade. American leaders know this, and this alone has proven sufficient to make the US-driven “great power rivalry” with China a defining aspect of the current geopolitical framework. The great irony is that China’s Stalinist leaders have shown no intention of overturning the principal foundations of the US-led international order—whether its global military spread, the dollar-centered financial system or the role of the dollar as the dominant reserve currency. For instance, much of the growing international use of the renminbi takes place through the offshore renminbi market, conventionally designated CNH, which is separated by capital controls and regulatory barriers from the onshore Chinese financial system. In other words, most Chinese non-dollar transactions are kept separate from the domestic economy by tight currency controls, and they often represent temporary exchanges prior to reconversion back into dollars.
While economically much weaker than China and the US, Russia has emerged as another “pole” within the global capitalist system over the past two decades owing to its vast territory, natural resources, large population, foreign investments and military technology (including its nuclear arsenal). Unlike China, Russia is an imperialist state, and the hostility between Russia and the US is both an example of inter-imperialist rivalry and another defining feature of the current system of global relations. European imperialists, now the main drivers of the Ukraine proxy war, also remain extremely hostile to Moscow. At the same time, the war has created tensions between Europe and the US, further highlighting the importance of Russia to the global order.
It would have been difficult to predict this turn of events in the days following the collapse of the Soviet Union, as newly capitalist Russia descended into economic collapse under the corrupt and subservient regime of Boris Yeltsin. In “Imperialist Rivalries Escalate” (1917 No.41), we detailed the process by which Russia reemerged as an imperialist power:
“Buoyed by rising oil prices in the first decade of this century, Russia’s capitalist oligarchy under Vladimir Putin’s government consolidated a strong independent state and managed to stabilize Russian capitalism, which had suffered from open plunder, disintegration and massive capital flight after the 1991 counterrevolution. Comparatively poor in technology in many industries, heavily reliant on natural resources and suffering from an underdeveloped banking sector, Russian capitalism has nevertheless developed highly oligopolistic giant corporations, fusing industrial and financial activities, with innumerable connections to the state. These corporations, beginning in Russia’s neocolonial ’near abroad,’ have made enormous overseas investments. In tandem, Moscow has projected Russian state power with considerable success, starting with its war with Georgia in 2008 and continuing ever since. Russia has made the journey from a weak and exploited capitalist country—one whose economy was disarticulated and pillaged by powerful foreign entities—to an independent imperialist state, though one marked by important elements of backwardness.”
Russia has pursued a remarkable course, weathering the storm of the 2008 financial crisis and reasserting itself as a global power. Its isolation from the US-led order, especially after 2014, has forced it to pursue alternative global networks and overhaul much of the decayed Soviet military and industrial base it inherited. Alongside Beijing, Moscow plays a leading role in the BRICS organization—a bloc of countries founded in 2009 to facilitate economic and financial integration and geopolitical coordination. Initially made up of Russia, China, Brazil and India, it has since expanded to include Egypt, Ethiopia, Indonesia, Iran, South Africa and the UAE along with several “partner countries” in Asia, Africa and Latin America. Together, BRICS accounts for almost half the world’s population and more than one-quarter of global GDP. But BRICS is not a coherent diplomatic bloc, as illustrated by the membership of both Iran and the UAE, nor any equivalent of NATO, as it is sometimes portrayed. Russia’s closer imperialist sphere is made up of smaller alliance structures such as the CSTO (encompassing many Eastern European and Central Asian countries) and a looser network of friendly neocolonial governments like Algeria and Sudan.
One of the first acts of an increasingly independent Russia was its intervention in the Syrian civil war, supporting the regime of Bashar al-Assad. It successfully thwarted Washington’s regime-change efforts until former al-Qaeda forces, backed by the US and Israel, took advantage of the utter economic collapse of the Syrian state to overthrow Assad in late 2024. Moscow continues to seek increased influence in the Middle East and maintains a close relationship with Iran. Although it lags behind China and Western imperialist countries, Russia has developed closer economic ties to the GCC economies. For instance, there are now more than 4,000 Russian companies registered in the United Arab Emirates, as “Russian capital in the UAE exceeded $30 billion in 2024” (TRT World, 23 October 2025).
Even before backing the “Maidan” coup in 2014, Washington had been seeking to ensure that Ukraine did not become a Russian protectorate. NATO has steadily expanded eastward since the fall of the Soviet Union, moving closer to Russian borders and encroaching upon previously unaligned territory. The prospect of Ukraine joining the Western military alliance, first signalled in 2008, has long been a red line for Russia, which shares a 2,000 km border with Ukraine. Yet the US, under both Republicans and Democrats, refused to take Ukrainian membership in NATO off the table. After a series of Western provocations, Russia invaded Ukraine in February 2022, annexing territories in the Donbas in addition to Crimea, which Moscow had seized in 2014. Defined as much by the context of inter-imperialist rivalry that triggered the conflict as by the infusions of Western aid and weapons to Kiev, the war is in essence a proxy conflict between NATO and Russia over a sphere of influence in Eastern Europe.
There was, however, another motivation for America’s pursuit of the Ukraine War: eliminating a major competitor in the oil and natural gas markets and increasing its leverage over Western Europe. This aspect of the Ukraine War highlights the contradictions of the NATO alliance and points to growing inter-imperialist tensions between the US and its supposed allies in Europe. The EU economy still relies primarily on fossil fuels to drive its industry: oil (33 percent), natural gas (24 percent) and coal (12 percent), with remaining energy needs met by nuclear power, biofuels, hydropower, solar and wind (Al Jazeera, 3 October 2025). Before the Ukraine War began in 2022, Europe was heavily dependent on Russian energy, with 45 percent of its natural gas and 27 percent of its oil coming from Russia. A combination of factors, including the destruction of the Nord Stream pipelines transporting Russian natural gas to Germany and EU-approved sanctions banning most Russian energy imports, initiated a painful transition away from dependence on Russia. The reduction of Russian energy imports has, however, been uneven across the continent:
“Despite its attempt to halt crude oil imports from Russia since June 2022, several EU countries have continued to rely on Russian energy. According to a report published by Al Jazeera in October 2025, Hungary and Slovakia are the top European buyers of Russian crude oil. Meanwhile, Belgium, France, and the Netherlands are Europe’s largest importers of LNG [liquified natural gas] from Russia. These transactions generated billions of euros in revenue for the Russian Federation from energy sales. This helped stimulate the Russian economy even as the international community continues to impose sanctions on Russian officials, oligarchs, and businesses due to their involvement in Russia’s ongoing invasion of Ukraine. Energy sales have also helped the Russian Federation purchase weapons and equipment used in the war in Ukraine.”
—Forbes, 7 January 2026
Nonetheless, by 2024, Russia accounted for only 19 percent of natural gas and 3 percent of oil in the EU. This drop represented a significant blow for Russia, which had exported about half of its oil to the EU. To compensate, Russia has strengthened its ties to China, which now takes in 48 percent of Russia’s crude oil exports (up from 30 percent in 2021). These transactions take place almost exclusively using Chinese and Russian currency. When Washington cut Russia out of the SWIFT system for international financial transactions following its invasion of Ukraine, Moscow started using the Chinese Cross-Border Interbank Payment System. In 2024, trade between Russia and China was valued at around $250 billion (Politics Today, 6 November 2025).
While the strengthening of the Russian–Chinese alliance is a negative outcome for the US, the Ukraine War has nonetheless boosted the fortunes of American energy corporations in Europe. According to the European Commission, “the European Union is the largest buyer of the United States’ natural gas and oil, which is an important element for ensuring transatlantic energy security and to allow a shared strong response to Russia’s military aggression against Ukraine.” Conveniently, the US has had to step in to fulfil Europe’s energy needs:
“In July 2025, U.S. President Donald Trump negotiated with the EU to purchase $750 billion in American energy, including LNG, over a three-year period. At the time, Axios reported that the Europeans believed the deal was important because LNG purchases from the United States are more affordable than those from the Russian Federation. This has also paved the way for the EU to completely phase out Russian LNG by the end of 2026.”
—Forbes, 7 January 2026
The claim that “LNG purchases from the United States are more affordable than those from the Russian Federation” is dubious. According to Ana Maria Jaller-Makarewicz, lead Europe energy analyst for the Institute for Energy Economics & Financial Analysis, “US LNG is the most expensive for EU buyers, but European companies keep signing contracts” (dw.com, 20 February 2026). If Russian LNG prices now approach American LNG prices, it is because Moscow has reset the price closer to the standard Title Transfer Facility (TTF) benchmark while the EU has sought to crack down on cheaper Russian LNG arriving via third-country hubs and Russia’s “shadow fleet.” Choking the flow of Russian natural gas to Europe has allowed the US to rapidly corner the European market. Prior to 2016, the US did not export LNG at all; today, it has become the largest global supplier of LNG, including 58 percent of LNG imports to the EU.
The European imperialists remain rabidly hostile to Russia, but they are also concerned about becoming overly dependent on the US for their energy at a time when they are seeking greater autonomy from an increasingly aggressive American imperialism. According to Reuters (30 January 2026), “Trump’s push to take over Greenland and recent tariff threats have sharpened concerns among some governments of the risk of becoming reliant on the U.S. for fuel.” Dan Jorgensen, the EU’s energy commissioner, spoke of the Greenland crisis as a “wake-up call” that Europe was in danger of “replacing one dependency with another.” Venezuela is another source of oil for the EU but, given Washington’s decapitation of the Bolivarian government last year with its abduction of President Nicolás Maduro and its demonstrated ability to cut off Venezuelan oil shipments at will (e.g., to Cuba), it is also not a route to the “energy independence” European leaders would like.
Rising energy prices caused by the Ukraine War harmed not only European consumers but European corporations. According to the International Energy Agency: “EU electricity prices for energy-intensive industries stayed elevated in 2025, again averaging over twice US levels and nearly 50% above those in China, similar to 2024, adding competitive pressure,” alongside increasing Chinese technical capacity and American tariffs. Small wonder that leading German manufacturers, including BASF and Volkswagen, have decided to close factories at home and set up shop in China, the US and Mexico. Reuters (10 February 2026) reports that German auto-industry association VDA conducted a “survey of small- and medium-sized German enterprises across the auto supply chain” which revealed that “72% of companies plan to dial back their investments in Germany, either by moving them abroad (28%), postponing them (25%) or cancelling them completely (19%).” Sounding the alarm about the “deindustrialization” of Europe, analysts at Arthur D. Little noted: “European industries are, in general, more impacted by macroeconomic variables such as high energy costs and supply chain tensions due to their reliance on imported energy (and limited domestic energy alternatives), proximity to geopolitical conflicts like the war in Ukraine, stricter regulations, and highly integrated supply chains” (February 2025).
Perhaps even more than the conflict in Ukraine, the Iran War started by the US and Israel on 28 February serves as a potential catalyst for a reconfiguration of inter-imperialist relations, illustrating the gap between America’s pretensions to global supremacy and its material capacities. Given the obvious folly of launching a war on Iran, it is perhaps not surprising that a consensus developed early on among bourgeois critics that the war never made any sense from an “America First” perspective and that the real culprit was Israel and the US “Israel Lobby.” Israeli Prime Minister Benjamin Netanyahu, who by his own admission had pushed for a war against Iran for 40 years, was reportedly a key factor in convincing Trump that the war was both necessary and likely to be over in a few days. The US State Department even admitted that “the United States is engaged in this conflict at the request of and in the collective self-defense of its Israeli ally” (21 April 2026). In the popular narrative, therefore, Trump was duped (or perhaps even blackmailed) into fighting “Israel’s war” against Iran despite the economic, military and reputational damage likely to be done to the United States.
This narrative reflects a fundamental misunderstanding of both America’s relationship with Israel and its long-standing imperial project for the Middle East, and it fails to understand the context of great-power politics. It is important to recall that the US has been the principal backer of Israel for almost 60 years, providing it with billions of dollars in military aid annually. While the support of countless politicians, both Republican and Democrat, has no doubt been purchased with Israel Lobby money, the Lobby would never have been in a position to exert such influence over America’s political class had it not been let into the halls of power in the first place. It was let in because, broadly speaking, the American empire requires a local enforcer in the Middle East, and Israel has served that purpose better than any other country. As then-Senator Joe Biden put it in June 1986: “Were there not an Israel, the United States of America would have to invent an Israel to protect her interests in the region.” Israel is America’s rabid attack dog; it is dangerous and capable of biting its master’s hand, but it is also useful when it comes time to fight, and ultimately the master can yank its chain.
Iran is the main obstacle to Israeli regional hegemony and, therefore, unfettered American dominance in the Middle East. It is also, crucially, an increasingly close ally of Russia and China with growing economic ties to those countries, though it lacks the sort of client-patron relationship with Russia or China that Israel has had with the US. An estimated 90 percent of Iran’s oil is exported to China, while more than 80 percent of the oil that normally passes through the Strait of Hormuz goes to Asia, with China being the leading destination over India, Japan and South Korea (Institute for Energy Research, 30 June 2025). Launching the war on Iran may have blown up in Trump’s face, but Tehran’s decision to close the Strait of Hormuz to its enemies but keep it open for its friends like China demonstrated that the US president was not wrong to see the strategic danger of leaving the Islamic Republic intact in this important region. While Israel’s goal was to balkanize and plunge its regional rival Iran into chaos, Washington’s goal was to realize its decades-long dream of recapturing Iran, neutralizing an important Russian and Chinese ally and gaining leverage over its rivals. This is, however, a convergence, not an identity, of interests. Tel Aviv’s opposition to peace—and its attempt to continue the brutal war in Lebanon it launched in parallel to the attacks on Iran—is a complication for the White House.
Despite massive damage inflicted on Iran and Trump’s erratic declarations of victory, “Operation Epic Fury” was an immediate disaster. Iran successfully used its inexpensive Shahed drones to pummel military, energy and transportation targets in Israel and throughout the region, including in Bahrain, Iraq, Jordan, Kuwait, Qatar, Saudi Arabia and the UAE. Iran broke through Israel’s “Iron Dome” defense system to hit key facilities. It struck several US military bases with powerful ballistic missiles, inflicting enormous damage and destroying “radar and missile-defense installations forming the backbone of the United States and allied early-warning architecture” in GCC countries (Defence Security Asia, 19 March 2026). Washington lost F15 fighter jets and other aircraft, including in an incident that ostensibly required the US to mount a rescue operation for one of its pilots—which Iran suggested was actually a cover for a botched attempt to steal its enriched uranium. One estimate puts the direct cost of the Iran War for the US at $113 billion (iran-cost-ticker.com).
Tehran’s seizure of the Strait of Hormuz, alongside its ability to pulverize the energy infrastructure and essential desalination plants in the Gulf, gave it incredible leverage over the regional and global economy, prompting a panicked response by the Trump regime involving incoherent attempts at diplomacy, bluster and a failed naval blockade. In mid June, Washington even signed a humiliating Memorandum of Understanding, which it immediately violated, pledging “to terminate all types of sanctions against” Iran, end hostilities and the threat of hostilities (including in Lebanon) and possibly allow Tehran to charge commercial vessels a fee to pass through the Strait of Hormuz following a grace period of “60 days only” (NBC News, 17 June 2026). Paul Musgrave of Georgetown University in Qatar described it as “a strategic calamity far greater than the U.S. defeat in the Vietnam War” (Foreign Policy, 16 June 2026). Although the fighting has resumed, there is no clear path to military victory for the US, which has to choose between getting bogged down in a new unwinnable quagmire (potentially triggering a global economic depression) and reaching some sort of agreement. Strategically, the war has turned into a defeat for US imperialism.
Acknowledging America’s humiliation in Iran, leading neocon Robert Kagan admitted:
“There will be no return to the status quo ante, no ultimate American triumph that will undo or overcome the harm done. The Strait of Hormuz will not be ’open,’ as it once was. With control of the strait, Iran emerges as the key player in the region and one of the key players in the world. The roles of China and Russia, as Iran’s allies, are strengthened; the role of the United States, substantially diminished.”
—The Atlantic, 10 May 2026
Russia and China, along with Iran, are indeed likely to emerge in a stronger geopolitical position as a result of the American defeat. Certainly the prestige of the US is tarnished, and its relations with Europe rendered even more tense. In its failed attempt to grasp the spigot of Iranian oil to China, the US succeeded in driving up energy costs for nearly everyone in what Warren Hogan of Judo Bank called “one of the most sudden increases in the cost of oil to the global economy ever” (Guardian, 10 March 2026). Europe was hit particularly hard, and its natural gas prices rose by two-thirds in the first week of the war alone.
To keep prices down, the US was even forced to lift sanctions on Iranian and Russian oil. Rather than smoothing things out with the Europeans, this measure only angered them more. Some European countries had in fact been pushing to ease sanctions on Russian energy exports, but the core leadership of the EU (including German chancellor Friedrich Merz and French president Emmanuel Macron) responded negatively to the news. At the same time, however, they themselves applied pressure on Ukraine to reopen the Druzhba oil pipeline connecting Russia and Europe, prompting Ukrainian president Volodomir Zelensky to complain bitterly of EU hypocrisy and “blackmail”: “How is this different from lifting sanctions on the Russians? Why can we in one case tell the United States that we oppose lifting sanctions, while on the other hand forcing Ukraine to resume oil transit through Druzhba—and at a political price that effectively pays for anti-European policies?” (BBC News, 15 March 2026).
Even before the Iran War, in the face of Trump’s tariffs and his threats to annex the Danish territory of Greenland, Washington’s imperialist allies were openly questioning their continued participation in the US-led order. At the World Economic Forum in Davos in January 2026, Canadian prime minister Mark Carney delivered a speech that echoed throughout the capitals of Europe. Carney exposed the post-WWII international system as a scam based on a liberal “lie” that “middle powers” like Canada, Britain, Germany and France repeated because it served their own interests:
“This fiction was useful, and American hegemony in particular helped provide public goods, open sea lanes, a stable financial system, collective security and support for frameworks for resolving disputes.…
“Over the past two decades, a series of crises in finance, health, energy and geopolitics have laid bare the risks of extreme global integration. But more recently, great powers have begun using economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited.
“You cannot live within the lie of mutual benefit through integration when integration becomes the source of your subordination.”
Imperialist “great powers” have always used “economic integration as weapons, tariffs as leverage, financial infrastructure as coercion, supply chains as vulnerabilities to be exploited,” among other mechanisms, to extract wealth from colonial, semi-colonial and neocolonial countries. The alliance of imperialist states under American hegemony was never more than a pact among thieves, and it was no secret that the price paid by “middle powers” to participate in the global crime syndicate was accepting the overwhelming military, financial and geopolitical supremacy of the United States and its ability to appropriate to itself some of the most lucrative sources of imperial plunder.
Carney’s aim was to convince the Europeans, Japanese and his fellow Anglosphere imperialists not to retreat into their own protectionist “fortresses”: “In a world of great power rivalry, the countries in between have a choice: compete with each other for favour, or combine to create a third path with impact. We shouldn’t allow the rise of hard power to blind us to the fact that the power of legitimacy, integrity and rules will remain strong if we choose to wield it together.”
Unfortunately for Carney, the material basis for such a “liberal” imperialist order has vanished, and the only real alternative for middle imperialists is to align themselves with one of the existing blocs or form their own. The Anglosphere, Japanese and European imperialists continue to rely on US technology, US markets and US dollars, and they are heavily connected to the American military–industrial–intelligence complex through NATO and other institutions (e.g., Five Eyes, AUKUS, Quad). They are also hostile to Russia, though some are less hostile towards China. It is an open question as to how global realignments will develop, but it is obvious that the status quo cannot hold.
The Anglosphere imperialists seem highly unlikely to break from the US. Despite Carney’s attempts to give Canada some more room to maneuver in the face of the behemoth to its south, there is no escaping the geographic and economic reality of Canada’s integration into US-dominated North America. The Canadian ruling class would like to continue strengthening ties with Europe and doing business with China, but it will ultimately make the rational calculation from its standpoint, and stick with its American cousin. Trump’s taunts about making Canada the 51st state, like his threats to take over Greenland, reflect the importance of countering Russian influence in the Arctic, a goal that Ottawa shares. Britain, too, for so long the most loyal of American allies in Europe, is unlikely to break that bond if push comes to shove, though its geographic distance from the US does not rule that out. Despite insisting that Britain was not participating in the Iran War, then prime minister Keir Starmer dutifully allowed the US to use RAF bases to launch its attacks.
Japanese imperialism was particularly exposed during the conflict in the Middle East, as it relies “on the region for about 95% of its crude oil and 11% of its LNG imports—roughly 70% and 6% respectively are shipped through the Strait of Hormuz” (World Economic Forum, 20 March 2026). Yet Japanese prime minister Sanae Takaichi met with Trump at the White House and indicated her commitment to strengthening economic and military ties with the US. As part of Trump’s efforts to “reindustrialize,” Tokyo and Washington signed an agreement in July 2025 that would see Japan “invest $550 billion directed by the United States to rebuild and expand core American industries” (White House, 23 July 2025). Tokyo seeks these deeper ties in part because it views China as a major threat and requires Washington’s protection. It could, however, one day come to discover, as the Gulf Arab states must surely now understand, the truth to Kissinger’s observation that “it may be dangerous to be America’s enemy, but to be America’s friend is fatal.”
European imperialists are rearming, and although they are encouraged to do so by Washington to meet NATO commitments, the consequences of this strengthening of independent imperialist states may eventually turn out not to be to the liking of the US. Germany is, for instance, in the midst of a remilitarization campaign to give it the “strongest conventional army in Europe”:
“On November 28, 2025, Germany approved a ¤524.54 billion budget for 2026. The new budget allocates ¤82.69 billion for the German Armed Forces (Bundeswehr), about 15% of the budget (Deutscher Bundestag, 2025). Although the target of spending 3.5% of GDP by 2029 remains unlikely, Germany’s defence spending trajectory has shifted decisively upward, with the 2026 budget marking another major step in Berlin’s rearmament efforts.”
—Atlas Institute for International Affairs, 19 December 2025
Total German military spending, when the Special Fund (Sondervermögen) is included, amounts to ¤108 billion for 2026.
France is attempting to position itself as the dominant military force in Europe. Three days into the Iran War, Macron delivered a historic speech at the Île-Longue submarine base in Brittany:
“By announcing the first quantitative increase in France’s nuclear warhead count since 1992 and unveiling the doctrine of ’forward deterrence’ (dissuasion avancée), Paris is signaling a watershed moment in continental security. This shift represents more than a technical upgrade; it is a calculated attempt to lead the restructuring of Europe’s security architecture during a period of deep geopolitical flux.”
—Center for Strategic and International Studies, 4 March 2026
Paris is boosting military spending significantly and increasing the number of nuclear warheads it possesses—a number it will no longer disclose. Furthermore, while retaining the decision on whether or not to use France’s nuclear arsenal (the only one in the EU), Paris anticipates deploying “nuclear-capable Rafale fighter jets to partner countries such as Germany and Poland,” as well as Belgium, Denmark, Greece, the Netherlands, Sweden and Britain, which has its own nuclear arsenal (Guardian, 2 March 2026). Effectively, this would mean using France’s nuclear deterrent across Europe.
At the beginning of the Iran War, France made a historic deployment of its naval power to the Middle East:
“Macron announced the deployment to the eastern Mediterranean and the wider Middle East of eight warships, two helicopter carriers and the nuclear-powered aircraft carrier Charles de Gaulle with its 20 Rafale fighter jets.
“The French frigate Languedoc arrived off Cyprus, a fellow European Union member, to bolster anti-drone and anti-missile defenses. Cyprus and France signed a new strategic partnership in December. Macron also said that two French frigates have been dispatched to the Red Sea to help ensure maritime security and freedom of navigation.”
—AP, 16 March 2026
France exhibited notable coolness towards Washington’s war on Iran, with Macron declaring that “France ’cannot approve’ of the strikes by Israel and the U.S. on Iran because they were carried outside of the framework of ’international law’” (AP, 3 March 2026). France’s display of military strength in the region may have been intended to signal that it has independent interests and the means to protect them. Defense News (12 March 2026) reports that France was:
“… the third-biggest major arms exporter to the Middle East in the 2021-2025 period, accounting for 11% of the region’s weapons imports, behind the U.S. with a 54% share and Italy with 12%, according to data from the Stockholm International Peace Research Institute.
“The deployment is a way for France to demonstrate it can lead and is a relevant naval power, said Mihai Sebastian Chihaia, an analyst at the Brussels-based European Policy Centre. It positions the wider European Union as a credible actor that stands ready to protect shipping, and share the burden of ensuring freedom of navigation and security of supply chains.…
“France is the only European country able to carry out such a naval operation, with the British no longer capable of doing so and the Germans unwilling to, former French President Francois Hollande said in a TV interview on Monday. He said it’s important that France can protect its assets and citizens in the region, and deploy an aircraft carrier to help ensure the security of its partners.
“The U.S. is increasingly seen by policymakers in the Gulf states as a net liability, with ’serious questioning of the utility of the U.S. security umbrella,’ Hasan Alhasan, a senior fellow for Middle East policy at the International Institute for Strategic Studies, said in a webinar on Monday. He said the U.S. has now twice dragged the Gulf states into a confrontation with Iran they did not want.”
The Netherlands and Italy also deployed frigates to the region. So, too, did Spain, whose prime minister Pedro Sanchez drew the ire of Trump by condemning the war as illegal and declaring that “[w]e will not be complicit in something that is bad for the world and that is also contrary to our values and interests, simply out of fear of reprisals from someone” (Guardian, 6 March 2026). Spain and Italy refused the US access to their airspace for attacks on Iran, and Italy banned Washington from staging assaults from Sicily. France and Germany turned down Trump’s request for military assistance to open the Strait of Hormuz back in March. The following month, an internal email by senior Pentagon policy adviser Elbridge Colby suggested suspending Spain from NATO and removing “difficult” countries from important positions within the alliance (Reuters, 24 April 2026).
Despite these developments, Europe’s current leaders are unlikely to want to thoroughly disentangle the continent from the US even as they seek to position their countries for a more independent role. But the political “center” in Europe cannot and will not hold in the face of crashing government revenues, deindustrialization and mass unemployment. GDP growth rates for Europe (and Japan) are comparatively weak. Figure 6, taken from a research briefing published by the British parliament in February 2026, shows the total GDP percentage change over the six year period ending in 2025. In July, the IMF projected a GDP growth rate of 2.3 percent for the US in 2026, with Japan at 0.6 percent and Britain at 1.0 percent. The euro zone overall is slated for only 0.9 percent growth, with Germany at 0.7 percent, France at 0.6 percent and Italy at 0.5 percent.
Figure 6: Real GDP percent change, G7 countries, 2019–25
Closer ties between European powers and Russia currently seem unthinkable. Western European leaders are among the most maniacal opponents of Russia, whose great-power status they are challenging via the proxy war in Ukraine. The remilitarization of EU countries is occurring within the context of that war, which Russia, despite suffering heavy economic and military costs, is winning. London, Paris and Berlin appear committed to pumping money and weapons into Ukraine to bleed Russia on the battlefield, and one of the sources of tensions with Washington is Trump’s on-again/off-again musings about letting the Europeans finish what the US helped to start.
However, in the face of the collapse of the neoliberal establishment in Europe, and the weakness of the labor movement, the likely beneficiaries will be the far right and fascists, whose ascent is being facilitated by the nationalist ideology and anti-immigrant sentiment pushed by the political “center” and some sectors of the left. The ruling classes are turning towards far-right parties with significant currents that favor opening up towards Russia. In France, for instance, Marine Le Pen’s National Rally (RN) is torn between a new generation that tends to favor Ukraine and an old guard that leans in the direction of normalizing relations with Russia. Politico (27 January 2026) comments:
“It’s an ideological battle with massive implications not only for France but for Europe’s entire security landscape. France is a nuclear-armed NATO heavyweight that is spearheading efforts to arrange postwar security guarantees for Ukraine—potentially involving peacekeepers. A Russia-friendly administration in Paris after the 2027 presidential election would upend the established order inside NATO.”
Recently cleared by a French court to stand for office, Le Pen has announced that she will be the RN candidate in 2027, and current polls show her likely to win the presidency. Le Pen “has repeatedly vowed to pull France out of NATO’s integrated command and has yet to live down a controversy over the party’s multi-million-euro 2014 loan from a Moscow-linked bank” (Ibid.). The far-right Alternative for Germany (AfD), which is vying with Chancellor Merz’s Christian Democrats to become Germany’s largest party, also hosts a significant faction that favors normalizing relations with Russia.
US imperialism remains and will remain a major factor in global economics, geopolitics and war, and it will continue to have imperialist allies and spheres of influence it dominates. But unrivalled global American hegemony is gone, and the relative status of US imperialism will continue to slip, though perhaps not as fast as its bewildered European counterparts. The central geopolitical and global economic rivalry in the world today is between a declining US—lashing out even at its junior imperialist allies—and a rising China. The decline of US imperialism, rooted in the contradictions of American capitalism, and the rise of China, subject to the contradictions of the deformed workers’ state, represent significant shifts in the material foundations of the global system. The superstructure of geopolitics and alliances has already begun to recalibrate itself, though the process is likely to be a long and painful one punctuated by sudden changes.
Increasing Chinese economic connections with Europe may also yield a changing strategic calculus, particularly in a world shaped by competition between American and Chinese AI juggernauts. It is notable that China does not play the role the Soviet Union did in unifying the entire imperialist world against it. While ultimately hostile to the collectivized property forms at the center of China’s economic model, many capitalists and capitalist governments, including in Europe, take a positive view of market reforms and China’s openness to massive imperialist investment. Moreover, unlike the general perception of Soviet Moscow even after Stalin’s dissolution of the Third International, Beijing is not the headquarters of an international “Communist” movement with mass parties in France, Italy and Greece. It is not out of the question that some European imperialists may opt to break with Washington and at least hedge both ways in the US–China rivalry, just as it is conceivable that some European countries may seek non-hostile or even friendly relations with Russia.
Inter-imperialist rivalry is a reality that will increasingly shape the global capitalist system. Further shocks to the world economy and America’s efforts to shore up its position could lead to various realignments of China and the imperialist powers. As well as the Ukraine War, the provocations by US, Australian and Japanese imperialism over Taiwan and the South China Sea provide a potential flashpoint (see “Inching towards WWIII,” 1917 No.47). Washington’s strategic defeat in Iran continues to unfold, and escalation will only make things worse for the US in the long run. Each conflict or potential conflict affects the various imperialist countries in different ways, and, even without changes of government, it is likely that the calculations of imperialist leaders will evolve in the coming months and years. Sooner or later, if it persists, imperialism will once again plunge the world into generalized war. Given the stakes in the nuclear age, it is not hyperbolic to suggest that humanity could be destroyed as a result of great-power rivalry in the 21st century.
Still, there is another “great power” that has yet to insert itself into the equation—the international working class, the only social force able to overturn the entire system. Its historic mission, assigned by its role in production and distribution within capitalist society, is to serve as the agent of revolutionary change from capitalism to communism. In 1859, Marx outlined the framework for understanding the material foundations of the transition from one mode of production to another:
“At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or—this merely expresses the same thing in legal terms—with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution.”
In Capital, he explained:
“One capitalist always kills many. Hand in hand with this centralisation, or this expropriation of many capitalists by few, develop, on an ever-extending scale, the cooperative form of the labour process, the conscious technical application of science, the methodical cultivation of the soil, the transformation of the instruments of labour into instruments of labour only usable in common, the economising of all means of production by their use as means of production of combined, socialised labour, the entanglement of all peoples in the net of the world market, and with this, the international character of the capitalistic regime. Along with the constantly diminishing number of the magnates of capital, who usurp and monopolise all advantages of this process of transformation, grows the mass of misery, oppression, slavery, degradation, exploitation; but with this too grows the revolt of the working class, a class always increasing in numbers, and disciplined, united, organised by the very mechanism of the process of capitalist production itself. The monopoly of capital becomes a fetter upon the mode of production, which has sprung up and flourished along with, and under it. Centralisation of the means of production and socialisation of labour at last reach a point where they become incompatible with their capitalist integument. This integument is burst asunder. The knell of capitalist private property sounds. The expropriators are expropriated.”
Monopoly capitalism anticipates the socialization of the means of production, but does so within the framework of private property. Rather than facilitating the transition to the “higher,” classless mode of production of communism, imperialism multiplies the contradictions of capitalism and brings humanity to the precipice of extinction. But imperialism has also created a global working class, which is growing and gaining strength even as it bears the brunt of necrotic capitalism. Our task as revolutionaries is to build the proletarian vanguard party that is the essential condition that will allow the working class to carry out its historic role.
Above all, building the revolutionary party centers on the defense and development of the Marxist program and applying it to the conditions of the day. If one had to distill the principles of the Marxist program into a single concept, it would be working-class independence from all wings of the capitalist class. Such independence does not preclude tactical retreats or even episodic cooperation with bourgeois forces where it benefits the working class, but it does preclude joining capitalist parties or forming governing coalitions with them and administering the capitalist state. Imperialism will not be reformed away by the working class taking over the repressive apparatus of capitalist class rule but by forging new levers of power rooted in the working class as the muscle and brain of modern production.
One vital application of the program of proletarian independence was developed during WWI by Lenin. Revolutionary defeatism was the notion that the defeat of one’s own imperialist government in war would be the lesser evil. This did not mean support for the imperialist rivals of the country one lives in but rather support for proletarian struggle against exploitation and war in all belligerent countries. The working class has no interest in the victory or relative position of its own imperialist masters, and it pursues its own interests even knowing that strike action, for example, will weaken the imperialist bourgeoisie in relation to its rivals. So be it. The working class must not allow itself to be captured by the logic of inter-imperialist rivalry:
“A revolutionary class cannot but wish for the defeat of its government in a reactionary war, cannot fail to see that its military reverses facilitate its overthrow. Only a bourgeois who believes that a war started by the governments must necessarily end as a war between governments and wants it to end as such, can regard as ’ridiculous’ and ’absurd’ the idea that the Socialists of all the belligerent countries should wish for the defeat of all ’their’ governments and express this wish. On the contrary, it is precisely a statement of this kind that would conform to the cherished thoughts of every class-conscious worker, and would be in line with our activities towards converting the imperialist war into civil war.”
—Lenin, Socialism and War, 1915
Among many self-described communists today, “imperialism” simply means the American empire, and anti-imperialism reduces itself to opposition to US imperialism. While this might produce a roughly correct political outlook for revolutionaries within the United States itself (though even in that case it is fundamentally wrong), it will lead to political adaptation to the ruling class in other imperialist states and to pro-imperialist supplication in neocolonial countries. Any revolutionary would wish to see the destruction of the American empire and its bloodstained institutions like NATO, but we do not promote the idea that Russian opposition or a split of middle imperialist powers from the US is historically progressive. It is clear that such a split would be carried out, even if under mass pressure from below, to pursue independent imperialist interests and would merely contribute to a reconfiguration of rival imperialist blocs eventually leading to world war. In Imperialism, Lenin explicitly connected the Kautskyist perspective of ultra-imperialism with this sort of political adaptation to social patriotism:
“Let us suppose that a Japanese condemns the annexation of the Philippines by the Americans. The question is: will many believe that he does so because he has a horror of annexations as such, and not because he himself has a desire to annex the Philippines? And shall we not be constrained to admit that the ’fight’ the Japanese is waging against annexations can be regarded as being sincere and politically honest only if he fights against the annexation of Korea by Japan, and urges freedom for Korea to secede from Japan?
“Kautsky’s theoretical analysis of imperialism, as well as his economic and political critique of imperialism, are permeated through and through with a spirit, absolutely irreconcilable with Marxism, of obscuring and glossing over the fundamental contradictions of imperialism and with a striving to preserve at all costs the crumbling unity with opportunism in the European working-class movement.”
Revolutionaries have a duty to defend the gains of the past. China, while it has become a major prop of global capitalist development, remains a deformed workers’ state not truly open to world markets. We give no political support to the Stalinist bureaucracy in Beijing. Nor do we portray the growth of Chinese economic relations with the world as inherently beneficial for the oppressed. We recognize, however, that China is not an imperialist country and that the collectivized property and state-planning mechanisms that continue to be at the core of the state power are profoundly progressive despite their manipulation by a conservative bureaucratic caste. We defend China against imperialist attack and internal counterrevolution while advocating proletarian political revolution to seize power. Our revolutionary defense of China against counterrevolution from without or within does not involve, and in fact precludes, support to any imperialist state that finds itself in an alliance with China. Imperialism in all its expressions is the biggest danger to what remains of the proletarian property forms in China.
China’s leaders seek peaceful coexistence with imperialism and do not even pretend to help the masses overthrow capitalism. Rather, they are pursuing the hopeless goal of maintaining their privileged status while preserving the collectivized property forms which are its contradictory basis and which are anathema for global capitalism. During the Iran War, a great deal was made in both Washington and Beijing about China’s supposed support to Iran in the conflict, e.g., transfers of cash and small arms. But the overwhelming direction of China’s policy was towards insulating its own economy and reducing the overall tension in the world system—significantly undermining the impact of Iran’s closure of the Strait of Hormuz. Beijing was even willing to unleash its domestic oil reserves onto the world market in order to keep prices down, denying itself a crucial strategic asset in a war over Taiwan or the South China Sea and negating much of the negotiating position Tehran had been able to achieve through pressure on global markets. At the same time, our defense of China does not involve demanding that the Stalinists pursue a strategy of frontal assault against the US. Ultimately, the solution to China’s vulnerability to imperialist attack lies neither in the military nor in the diplomatic realm, but in the international solidarity and mobilization of workers and oppressed people. Such mobilization threatens not only capitalism but the precarious rule of the Stalinist bureaucracy.
As consistent anti-imperialists, we call for the independence of all colonies and fight against any attempt by the imperialists to subordinate non-imperialist countries. We defend the latter from imperialist attack, just as we give no political support to the bourgeois nationalist regimes that typically govern them. Only in those cases where a neocolonial country has been subordinated to an imperialist power in war to become a proxy do we withdraw our support. Notably, that was not the case for Iran in its defensive struggle against US-Israeli aggression, despite the fact that Russia was almost certainly providing logistical, intelligence and possibly weapons assistance to Tehran. Unlike the Ukraine War, the Iran War was not fundamentally a proxy conflict between contending imperialists, and we therefore maintained our military defense of Iran.
As the world inches towards WWIII, we take programmatic inspiration from the Trotskyist movement during the Second World War. In the event of such a catastrophe, we would call for the defeat of all imperialist powers and for the revolutionary defense of China. In the midst of WWII, Trotsky authored the manifesto of the Fourth International on the war, “Imperialist War and the Proletarian World Revolution” (May 1940). Its general perspective is the one that must guide revolutionaries today as we enter an increasingly volatile period of inter-imperialist rivalry:
“The capitalist world has no way out, unless a prolonged death agony is so considered. It is necessary to prepare for long years, if not decades, of war, uprisings, brief interludes of truce, new wars, and new uprisings. A young revolutionary party must base itself on this perspective. History will provide it with enough opportunities and possibilities to test itself, to accumulate experience, and to mature. The swifter the ranks of the vanguard are fused the more the epoch of bloody convulsions will be shortened, the less destruction will our planet suffer. But the great historical problem will not be solved in any case until a revolutionary party stands at the head of the proletariat. The question of tempos and time intervals is of enormous importance; but it alters neither the general historical perspective nor the direction of our policy. The conclusion is a simple one: it is necessary to carry on the work of educating and organizing the proletarian vanguard with tenfold energy. Precisely in this lies the task of the Fourth International.…
“Independently of the course of the war, we fulfill our basic task: we explain to the workers the irreconcilability between their interests and the interests of bloodthirsty capitalism; we mobilize the toilers against imperialism; we propagate the unity of the workers in all warring and neutral countries; we call for the fraternization of workers and soldiers within each country, and of soldiers with soldiers on the opposite side of the battle front; we mobilize the women and youth against the war; we carry on constant, persistent, tireless preparation for the revolution—in the factories, in the mills, in the villages, in the barracks, at the front, and in the fleet.
“This is our program. Proletarians of the world, there is no other way out except to unite under the banner of the Fourth International!”