The recent discussions surrounding U.S. tariff policies have prompted stark warnings from a group of experts who argue that such protectionist measures could destabilise the global trade system and undermine America’s own economic health. During a recent panel event hosted by the World Salon and the Institute for China-America Studies, participants likened the U.S. approach to tariffs to an “addictive drug,” suggesting that once corporations become reliant on trade protections, they abandon innovation in favour of lobbying for more government favours.
Randall Morck, a prominent economist from the University of Alberta, expressed concern over the U.S.’s trajectory under the current policy framework. He warned that the U.S. could find itself mirroring Argentina’s past economic decline due to high tariffs if current trends persist. The panel highlighted that the implications for global commerce are severe, with numerous countries potentially suffering from a fractured trading environment and negative consequences rippling through both the U.S. economy and the wider international community.
Patrick Leblond, an expert from the University of Ottawa, discussed the erosion of trust in global trade agreements as a direct result of the Trump administration’s policies. He noted that this instability could lead to diminished investment opportunities and job losses, extending beyond U.S. borders, particularly affecting trade relationships with allies such as Canada. The atmosphere of uncertainty stifles growth, leaving global markets vulnerable to fragmentation.
Furthermore, Enrique Dussel Peters from the National Autonomous University of Mexico described the evolving “triangular relationship” between the U.S., China, and neighbouring nations like Mexico. He argued that U.S. tariffs, often framed as national security measures, threaten the very multilateral systems established in the aftermath of World War II. “The United States is retracting as the founder and saying, I will not participate under the rules that I established several decades ago,” Dussel Peters stated, indicating that such a withdrawal harms global supply chains while elevating costs for American consumers as companies adapt to disrupted markets.
Support for these tariff policies remains tenuous even among conservative economists. Art Laffer, a prominent supply-side advocate and supporter of Trump’s presidency, recently voiced alarm over the destabilising effects of tariffs, warning that they contradict the principles of free trade. Despite his admiration for Trump’s negotiating skills, Laffer’s concerns highlight the internal conflict facing some proponents of the administration who recognise the negative economic repercussions of protectionism.
Treasury Secretary Janet Yellen added to this sentiment, asserting that the U.S. economy is on a path of stability, characterised by low inflation and steady job growth. However, she cautioned that proposed sweeping tariffs on foreign goods could reverse this progress and be economically detrimental to American citizens, not foreign entities. “Americans,” she emphasised, “not foreign countries, would bear the cost of tariffs,” showcasing her commitment to advocating for a more sustainable and equitable fiscal policy.
Furthermore, China’s response to recent U.S. tariff escalations has been notable—its Ministry of Foreign Affairs condemned the U.S. for its unilateral approach, emphasising the negative impact on global production and supply chains. Retaliatory measures from China, including tariffs on American goods and suspending imports of certain produce, highlight the escalating tensions. These dynamics point toward a broader geopolitical struggle, one that could reshape global trade frameworks if left unchecked.
European stakeholders have similarly voiced concerns over the implications of heightened protectionism. Paolo Gentiloni, the European Economic Commissioner, warned that any increase in U.S. tariffs could prove harmful to both the U.S. and European markets. Given the interdependency of the economies, particularly for nations heavily reliant on exports to the U.S., the potential for trade conflict could disrupt established economic stability across the Atlantic.
The cumulative insights from economists and policy experts present a sobering reality—current tariff strategies could inhibit the U.S.’s competitive edge, increase prices for consumers, and lead to long-term fragmentation within global markets. As the trade landscape evolves, the necessity of engaging with established trade norms has never been more critical for ensuring both national and global economic well-being.
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Source: Noah Wire Services
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