U.S. tariffs isolate its economy, burden consumers, and weaken its global trade influence while others advance.
by Xinhua writer Gao Wencheng
LONDON, Aug 12 (NNN-XINHUA) – By imposing tariffs worldwide, the United States will cut itself off from globalisation, and the consequences, such as rising prices, will be borne by U.S. consumers, British economist, John Ross, said.
The global economic and trade system is now divided, due to U.S. President Donald Trump’s tariffs: the United States stands alone on a protectionist path, while China and other major Global South economies have embraced globalisation and thrived, Ross, a senior fellow of Chongyang Institute for Financial Studies at Renmin University of China, told Xinhua in a recent interview.
“The share of Global South economies in world trade continues to grow, and the overwhelming majority of countries remain committed to advancing globalisation,” he said.
Then there are a few economies, in Ross’s view, that find themselves caught between the two sides: they are, at least in theory, committed to globalisation but face political pressure from the United States.
For example, the European Union has agreed to a “very bad” trade deal with the United States, a deal widely recognised as poor by commentators on both sides of the Atlantic, he added.
Ross argued that, the U.S. tariff policy is unlikely to succeed for two main reasons: First, in the short term, the American economy is slowing this year. Second, from a structural perspective, the United States is no longer strong enough to shape the overall direction of world trade. While it can still influence the share of global imports entering its own market, its proportion of world trade is expected to continue shrinking, weakening its position.
“The effects are negative,” said Ross, who once served as director of economic and business policy for the mayor of London. “Unless other countries make major mistakes, the United States is not in a strong enough position to dominate world trade.”
Ross pointed out that for the United States, the direct effect of tariffs is to push up domestic prices, which amounts to a disguised tax on American consumers.
With the U.S. economy dominated by services, industries such as steel and aluminum that could benefit from tariffs make up only a tiny fraction of the economy, meaning most sectors and consumers will suffer from higher costs, he said.
Opinion polls show that a majority of Americans view tariffs as “harmful” because they have directly felt the rising living costs, while the economy has slowed from the high growth rates of the past few years, he noted.
While tariffs may temporarily protect a handful of industries, Ross argued, they will damage the broader U.S. economy by raising costs along supply chains.
He cited the example of U.S. restrictions on solar panel imports, which failed to create strong domestic producers, increased the cost of new energy projects, and ultimately hurt consumers.
“The key question is how the American public will respond, because Trump is attempting to overturn the pro-globalisation policy the United States has pursued since World War II,” said Ross. “That’s a major historical question: will the public go along with it, or will they realise it’s making their lives worse and vote against it?”– NNN-XINHUA
