Tariff Photo:VCG

As the US tariff policy continues to pile ever-growing pressure on the US economy and financial markets, it has become evident that Washington's use of tariffs as a means to gain the upper hand in trade negotiations or economic competition is an increasingly untenable strategy. The unilateral US approach toward global trade is more likely to plunge its own economy into a predicament rather than achieving its intended goals.

US Secretary of State Marco Rubio said on Sunday that once the US has imposed tariffs on its major trading partners, it could engage in bilateral talks with countries on new trade agreements, Reuters reported.

The news came at a time when the Trump administration's flip-flopping on tariff policies has caused confusion and uncertainty in the market. In particular, with the US set to impose reciprocal tariffs on its trading partners on April 2, investors are left in limbo, uncertain about the economic trajectory.

The question of whether the US economy can endure such a large-scale tariff war is not even a matter of debate. The answer is clearly no. Fears of a US economic slowdown are on the rise as the combination of escalating tariffs, falling stock markets and the Federal Reserve's hawkish stance creates anxiety across the financial markets.

Even US Treasury Secretary Scott Bessent said in an interview that aired on Sunday that there are "no guarantees" there will not be a recession in the US, although there could be an adjustment, Reuters reported.

According to JP Morgan's chief economist, there is about a 40 percent chance of a US recession this year and a risk of lasting damage to the country's standing as an investment destination if the administration undermines trust in US governance. US stocks have suffered their sharpest selloff in months over recent weeks as investors have grown nervous that the US tariffs will slow the economy,Reuters reported. 

These concerns are not alarmist. They reflect the growing strain on the US economy and financial markets as the tariff war persists. The US government's reliance on tariffs as a primary tool for trade talks is increasingly likely to be a double-edged sword. While the intention behind imposing tariffs is to put pressure on imported products, the policy is bound to backfire, inflicting significant harm on the US economy. Tariffs increase the cost of imported goods, which directly raises expenses for both businesses and consumers. For US companies that depend on imported raw materials and intermediate goods, higher production costs have eroded their competitiveness in global markets. 

Moreover, the disruption and restructuring of supply chains caused by tariff wars have amplified economic uncertainty, making it difficult for businesses to plan and invest for the long term.

More importantly, in response to US tariffs, its trading partners will not sit idly by. Retaliating with high tariffs on US exports could become an option for many countries. Perhaps even more worrying is the growing global resistance to US tariff policies. Many countries are actively seeking to diversify their economic partnerships and reduce their reliance on the US by forging new trade alliances. This global economic restructuring could indicate a significant shift away from US-centric trade networks, potentially leading to far-reaching changes that exceed initial expectations.

In essence, while the US may believe it is holding the "bargaining chip" of tariff pressure in trade negotiations, the negative impact of these tariffs on the US economy itself, such as rising costs for domestic businesses and consumers, disruptions to supply chains, and the subsequent loss of competitiveness in the international market, have greatly weakened its bargaining position.

The US tariff policy is marred by a zero-sum mindset, which wrongly assumes that one country's gain must come at another's expense. In today's closely connected global economy, this thinking is outdated. Every policy should consider how to increase the interests of both sides rather than unilaterally pursuing the maximization of its own interests. Despite the economic might of the US, it lacks the clout to make the entire world pay for its ill-conceived economic policies. The sooner the US realizes this and abandons its self-destructive tariff policy, the better chance it has of salvaging its economy from the impending recession.

Global Times