INTERNATIONAL
US tariff hike harms not only global economy, but also US itself
US imposes steep tariffs on 69 countries, raising trade tensions and risking recession, inflation, and global economic backlash. - REUTERS
THE U.S. modified tariffs with dozens of its trading partners will harm not only global economy, but also U.S. itself, according to a China Media Group (CMG) commentary issued on August 7 (Thursday).
AI Brief
An edited English-language version of the commentary is as follows:
The U.S. government's modified version of the so-called "reciprocal tariffs" officially took effect on Thursday, imposing tariffs ranging from 10 percent to 41 percent on a total of 69 countries and regions around the world. According to the latest estimates, the average effective tariff rate in the United States has reached 18.3 percent, the highest level in nearly a century.
International public opinion believes that the implementation of the so-called "reciprocal tariffs" signifies a further escalation of trade protectionism by the U.S. government. This not only casts a shadow over the global economy but will also bring deeper backlash pain to the U.S. itself.
Professor Wang Xiaosong from the School of Economics at Renmin University of China said in an interview with The Real Point Commentary that the U.S. government's forcible implementation of the so-called "reciprocal tariffs" aims to use it as a bargaining chip to force trade partners to concede more benefits. At the same time, this is also a preparation for the upcoming midterm elections, hoping to gain more votes.
Yahoo Finance believes that the negative effects of the tariff policies are accelerating, while several international institutions have pointed out that recent indicators show the U.S. economy is "on the brink of recession".
The latest survey results from the U.S. Institute for Supply Management (ISM) indicate that the U.S. purchasing managers' index (PMI) for July stood at 48 percent, marking the fifth consecutive month of decline. In terms of manufacturing economy, 79 percent of industries in the U.S. manufacturing GDP showed contraction in July, significantly higher than the 46 percent in June.
An article published on The Wall Street Journal website on Wednesday pointed out that uncertainties such as U.S. tariff policies continue to put pressure on the country's manufacturing sector, with almost all manufacturing-related economic activities contracting this year.
The U.S. government repeatedly claims that it will use tariff policies as a toll to ensure sufficient employment, but recent data from the U.S. Department of Labor shows that the unemployment rate in July rose by 0.1 percentage points month on month to 4.2 percent, while the current average duration of unemployment for individuals in the U.S. is 24.1 weeks, the longest over three years. Data released by the ISM indicates that the employment index for July was only 43.4 percent, the lowest level in more than five years.
U.S. media reports that the U.S. job market slowed sharply in July, indicating that the government's trade policies may be suppressing employment. Time magazine believes that the U.S. government's attempt to provide jobs in the manufacturing sector for domestic workers through tariff policies is "wishful thinking".
Meanwhile, the inflation situation in the U.S. is also concerning. The latest data released by the U.S. Bureau of Economic Analysis shows that the personal consumption expenditures price index, one of the inflation indicators, rose by 2.6 percent year on year in June, up from the 2.4 percent in May, exceeding the ideal inflation target of 2 percent.
David French, senior vice president of government relations at the National Retail Federation, the largest retailer group in the United States, pointed out that these increased tariffs are paid by U.S. importers and will ultimately be passed on to consumers, harming the interests of businesses.
The impact of tariff policies on U.S. business is becoming increasingly evident. Companies like Whirlpool and Procter and Gamble have been directly affected by the policies.
Multiple deteriorating data points have intensified market concerns about a recession in the United States. Gilles Moec, a chief economist at French insurer AXA, recently predicted that tariffs will drag down U.S. GDP by approximately 0.75 percentage points over the next 12 months, potentially reaching one percentage point by the end of 2026.
Additionally, the U.S. practice of tariff bullying has also harmed its own credibility. Deutsche Bank believes that such aggressive tariff policy has already damaged the dollar's status and is accelerating the pace of "de-Americanization" globally.
On the contrary, data released by Chinese authorities shows that in the first seven months of this year, China's trade in goods maintained an upward trend, registering a year-on-year increase of 3.5 percent, accelerating by 0.6 percentage points compared with the figure in the first half of the year. Imports and exports to ASEAN countries, EU countries, African countries and Central Asian countries all witnessed growth, demonstrating strong resilience and vitality.
This fully proves that engaging in tariff bullying will not bring long-term benefit. Only through open cooperation can all parties achieve mutual benefits and win-win outcomes.
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AI Brief
- The US launched new "reciprocal tariffs" up to 41%, pushing its average tariff rate to a 100-year high of 18.3%.
- Experts warn the tariffs may worsen inflation, hurt employment, and push the US economy toward recession.
- Critics say the policy damages global trust and US credibility, while China's trade continues to grow steadily.
An edited English-language version of the commentary is as follows:
The U.S. government's modified version of the so-called "reciprocal tariffs" officially took effect on Thursday, imposing tariffs ranging from 10 percent to 41 percent on a total of 69 countries and regions around the world. According to the latest estimates, the average effective tariff rate in the United States has reached 18.3 percent, the highest level in nearly a century.
International public opinion believes that the implementation of the so-called "reciprocal tariffs" signifies a further escalation of trade protectionism by the U.S. government. This not only casts a shadow over the global economy but will also bring deeper backlash pain to the U.S. itself.
Professor Wang Xiaosong from the School of Economics at Renmin University of China said in an interview with The Real Point Commentary that the U.S. government's forcible implementation of the so-called "reciprocal tariffs" aims to use it as a bargaining chip to force trade partners to concede more benefits. At the same time, this is also a preparation for the upcoming midterm elections, hoping to gain more votes.
Yahoo Finance believes that the negative effects of the tariff policies are accelerating, while several international institutions have pointed out that recent indicators show the U.S. economy is "on the brink of recession".
The latest survey results from the U.S. Institute for Supply Management (ISM) indicate that the U.S. purchasing managers' index (PMI) for July stood at 48 percent, marking the fifth consecutive month of decline. In terms of manufacturing economy, 79 percent of industries in the U.S. manufacturing GDP showed contraction in July, significantly higher than the 46 percent in June.
An article published on The Wall Street Journal website on Wednesday pointed out that uncertainties such as U.S. tariff policies continue to put pressure on the country's manufacturing sector, with almost all manufacturing-related economic activities contracting this year.
The U.S. government repeatedly claims that it will use tariff policies as a toll to ensure sufficient employment, but recent data from the U.S. Department of Labor shows that the unemployment rate in July rose by 0.1 percentage points month on month to 4.2 percent, while the current average duration of unemployment for individuals in the U.S. is 24.1 weeks, the longest over three years. Data released by the ISM indicates that the employment index for July was only 43.4 percent, the lowest level in more than five years.
U.S. media reports that the U.S. job market slowed sharply in July, indicating that the government's trade policies may be suppressing employment. Time magazine believes that the U.S. government's attempt to provide jobs in the manufacturing sector for domestic workers through tariff policies is "wishful thinking".
Meanwhile, the inflation situation in the U.S. is also concerning. The latest data released by the U.S. Bureau of Economic Analysis shows that the personal consumption expenditures price index, one of the inflation indicators, rose by 2.6 percent year on year in June, up from the 2.4 percent in May, exceeding the ideal inflation target of 2 percent.
David French, senior vice president of government relations at the National Retail Federation, the largest retailer group in the United States, pointed out that these increased tariffs are paid by U.S. importers and will ultimately be passed on to consumers, harming the interests of businesses.
The impact of tariff policies on U.S. business is becoming increasingly evident. Companies like Whirlpool and Procter and Gamble have been directly affected by the policies.
Multiple deteriorating data points have intensified market concerns about a recession in the United States. Gilles Moec, a chief economist at French insurer AXA, recently predicted that tariffs will drag down U.S. GDP by approximately 0.75 percentage points over the next 12 months, potentially reaching one percentage point by the end of 2026.
Additionally, the U.S. practice of tariff bullying has also harmed its own credibility. Deutsche Bank believes that such aggressive tariff policy has already damaged the dollar's status and is accelerating the pace of "de-Americanization" globally.
On the contrary, data released by Chinese authorities shows that in the first seven months of this year, China's trade in goods maintained an upward trend, registering a year-on-year increase of 3.5 percent, accelerating by 0.6 percentage points compared with the figure in the first half of the year. Imports and exports to ASEAN countries, EU countries, African countries and Central Asian countries all witnessed growth, demonstrating strong resilience and vitality.
This fully proves that engaging in tariff bullying will not bring long-term benefit. Only through open cooperation can all parties achieve mutual benefits and win-win outcomes.