U.S. Tariffs Cause Global Economic Shock, Economists Warn of Recession

The United States has been actively reaching out to China through multiple channels, expressing a willingness to discuss tariffs. This move comes amidst growing concerns over the economic impact of the U.S.'s protectionist policies, which have been criticized for causing significant harm to the global economy. The U.S. government's unilateral and protectionist approach has led to increased tariffs on a wide range of goods, pushing the actual tariff levels to their highest point in a century. This has resulted in a "major negative shock" to the world economy, with the uncertainty surrounding these measures further impacting economic activities and future prospects.

The U.S.'s aggressive use of tariffs has been compared to throwing a large stone into the global economy, creating waves that are now compounding. Beyond the immediate pressure on economic growth, the tariff shock is expected to cause lasting structural damage. This could slow down global innovation, increase barriers to green technology trade, and hinder the progress of sustainable development worldwide. Developing countries and emerging markets are particularly vulnerable to these disruptions, as they rely heavily on global trade for their economic growth and industrial modernization efforts.

Historical examples from the U.S. itself illustrate the dangers of protectionism. A review of six economic recessions in the U.S. since the 19th century shows that five of them were either directly caused or significantly worsened by tariffs and trade restrictions. The most notorious example is the 1930 Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 imported goods to their highest levels in history. This act exacerbated the Great Depression and led to a global economic crisis. More recently, the U.S.'s unilateral trade war with China has been described as an "expensive policy experiment" that ultimately backfired.

In response to these concerns, a growing number of U.S. economists and policy experts have signed a "Declaration Against Tariffs." This declaration criticizes the current U.S. tariff policies for misinterpreting history, misjudging the present situation, and denying fundamental economic principles. It warns that these policies could lead to a self-inflicted economic recession. The real-world impacts are already being felt, with rising prices for essential goods, shortages of baby supplies, and small businesses struggling to survive. Farmers are reporting not only the loss of markets but also the loss of future opportunities. The economic uncertainty caused by these tariffs has left many U.S. companies paralyzed, and the International Monetary Fund has downgraded its growth forecast for the U.S. economy this year.

The historical lessons are clear: any form of economic bullying that harms others will ultimately backfire. The only sustainable path forward is through openness and cooperation. The U.S. should reconsider its current approach and work with other nations to maintain an open and stable global economic system. This would provide the stability and positive energy needed to navigate the current economic challenges and ensure a prosperous future for all.