Chinese Communist Party (CCP) Mouthpiece Global Times: 'The U.S. Tariff Policy Is Marred By A Zero-Sum Mindset'

Commenting to the Trump administration's decision to double tariffs on Chinese imports from 10 to 20 percent, an editorial in the Chinese Communist Party (CCP) mouthpiece Global Times stated: "The U.S. tariff policy is marred by a zero-sum mindset." In the beginning of March, China announced a series of retaliatory measures against the U.S., including 10- to 15-percent tariffs on U.S. agricultural products.

(Source: X)

MEMRI China Media Studies Project Special Advisor Masigan: U.S. Tariff's Impact On China Will Be Minimal

According to MEMRI China Media Studies Project Special Advisor Andrew J. Masigan, who is a Manila-based economist, businessman, and political columnist for The Philippine Star, President Donald Trump's tariff policy is motivated by negotiating tactics and the will to reduce U.S. trade deficits with its trading partners (which as of end-2024, amounted to $918.4 billion) by raising revenues through tariff collection and compelling manufacturers affected by tariffs to move their production to the U.S.

Yet, according to Masigan, the impact on China will be minimal. "U.S.-China trade has diminished significantly since Trump imposed tariffs in his first term. China has successfully diversified its export market since 2017, effectively weaning its dependence on the U.S. The Economist magazine forecasts a minimal impact on the Chinese economy to the tune of only 0.3 percent of GDP over the next few years," Masigan stated. He added that the first round of tariffs against China in 2018-2019 proved that tariffs were ineffective in doing the job. Masigan asserted: "On the contrary, it even increased the deficit. When tariffs were imposed in 2018, American imports from China fell by 16 percent. But American exports to China also decreased by 11 percent due to retaliatory tariffs. The net effect was a reduction in America's trade deficit by $51 billion. However, the United States imported more goods from Southeast Asia, Japan, and Korea. In the end, the United States' aggregate deficit spiked to $99.8 billion the following year. Tariffs failed to reduce the trade deficit as businesses simply diverted their source of imports."

Masigan also explained that, as far as compelling manufacturers to set-up factories in the United States goes, a number of factories like Samsung and LG (formerly manufacturing from China) did so following the first round of tariffs on China. However, its effect on the American economy was minimal. This is because the United States' unemployment rate was already low. Today, unemployment – Masigan said – stands at 4.1%, which is nearly full employment. "Hence, tariffs is the wrong prescription to address American's core problem, which is rising prices," Masigan stressed.

"In terms of raising revenues through tariffs, the experience in 2018 proved that tariffs failed to do the job as well. While the United States expected a windfall of $87.5 billion, the collection realized was only $25 billion. Again, this is because importers diverted their suppliers from China to other countries," Masigan said, adding: "Tariffs proved to be a bad idea during Trump's first presidency. His employing the same strategy again is baffling."

Renowned American Economist Hanke: "TARIFFS ALWAYS BACKFIRE"

Commenting on U.S. tariffs on China, renowned American economist and professor of applied economics at the Johns Hopkins University, Steve Hanke, wrote on X: "TARIFFS ALWAYS BACKFIRE = A LOSER'S GAME."[1] On a post on February 3, 2025, Hanke stated: "Tariffs drain American wallets. The Tax Foundation estimates Pres. Trump's tariffs on Canada, Mexico, and China will cost U.S. consumers $830 per household in 2025. TRUMP = MERCANTILIST = BAD NEWS."[2]

In 2019, Prof. Hanke wrote in Forbes: "Trump and his trade team embrace the notion that the U.S. trade deficit, something the U.S. has registered every year since 1976, is a 'bad' thing, something that should be dramatically reduced (or eliminated) if America is to be First. They also believe that the culprits for this 'bad' state of affairs are unfair trade deals and unfair trade practices employed by foreign countries. Their elixir to eliminate the trade deficit is a strong dose of tariffs and other anti-trade policies imposed on foreign exports."

He added: "U.S. trade deficits are not caused by so-called unfair trade practices. They are made in the good old U.S.A. President Trump can bully countries he identifies as unfair traders, he can impose all the restrictions on trading partners that his heart desires, but it will not change the trade balance. It will only alter the composition of those exporting to the U.S. And, by affecting this composition, the president's interventions will hurt the U.S. consumer."[3]

MEMRI's Board of Advisors Lacalle: 'Russia, Indonesia, India, Brazil, China, These Are Amongst The Most Protectionist Economies In The World'

Yet, prominent Spanish economist Daniel Lacalle, who is a member of MEMRI's Board of Advisors, underlined that tariffs do not cause inflation: "Inflation is caused by a massive increase in the quantity of money, money supply growth, and money velocity increasing. That only happens with higher government spending, higher government indebtedness, and more money printing."

Lacalle stressed that tariffs may increase individual prices, if the goods are produced entirely in foreign countries and if demand is not elastic. However, if tariffs are going to make an individual price rise, the rest of the prices for the same quantity of money would not go up – in fact they would go down. Higher money supply growth, higher government spending, and higher indebtedness are what create inflation.

He then stated: "Tariffs are also a geopolitical weapon. If we look at the reality of these economies [on which the U.S. imposed tariffs], what we can see is that they have two Achilles heels. Number one, they have very significant levels of industrial and productive overcapacity. Number two, they need U.S. dollars... in order to stabilize their currencies and their economies. Therefore, the most likely scenario is that those tariffs will be absorbed by the producers. When they have overcapacity, they need the trade surplus, they need U.S. Dollars. Therefore, most of those tariffs are going to be absorbed by the producers."

Lacalle mentioned that China is among the economies that impose the highest levels of tariffs on the global economy. Hence, "it is very important to understand that the United States cannot be the only economy in the world that has open borders, open windows, and open doors, while everybody else is imposing more restrictions..."

"Nobody seems to be talking about protectionism when it's about the global economy... Russia, Indonesia, India, Brazil, China, these are amongst the most protectionist economies in the world; the ones that put the highest number of trade barriers and tariffs. So, with the Trump tariffs, what we can see is also a geopolitical response. These countries are getting together to try to create a system that on the financial side and on the political side opposes the United States and the West. At the same time, they need enormous exports to the United States and the inflow of dollars."[4]

MEMRI's Board of Advisors Lacalle: "Why Are Markets Rising in Europe And Falling In The United States? Not Because Of Tariffs"

Concerning the weakness of the markets, Lacalle wrote: "The consensus narrative tells you that markets are weak because of Trump's tariffs. However, that is a typical excuse that makes no sense. If tariffs were the cause of concern, markets would have tanked in 2016 and in 2021. Remember that Biden maintained and increased all of Trump's tariffs. Between 2016 and 2024, the tariffs imposed by the European Union and China on the United States were much larger than levies against them. However, you never read or heard that the EU and China tariffs were going to destroy the economy or lead to massive inflation."

"The mainstream consensus narrative always wants you to believe that tariffs are fine if imposed by socialist countries and evil if imposed by the United States. However, if the market was alarmed by tariffs and the disastrous impact they may have on the economy, German and Japanese bond yields would not have soared. Instead, they would have plummeted as investors sought refuge. Furthermore, if the world feared a U.S. economic disaster, Treasury bond yields would not have declined."

Hence, Lacalle asked: "Why are markets rising in Europe and falling in the United States? Not because of tariffs," he explained. The answer is simpler: market participants are betting on a hawkish Fed and a very dovish European Central Bank (ECB) and People's Bank of China (PBOC).

"Follow the money printer. Many market participants are scared of persistent inflation but aim capital flows to the markets that may benefit from more money printing, as is the European case, and stimulus plans, like China. However, this is a dangerous bet. Betting on European markets due to a massive spending and easing plan is not new. We have seen it before. Central planning never works and the disappointments that follow are enormous. This time is not different. It will not be different with China either, because its overcapacity and real estate challenges come from previous 'stimulus' plans," Lacalle wrote, adding that market participants in the United States may be used to insane spending, debt, and printing as the reasons to buy. "However, the situation for the U.S. economy was unsustainable. If the administration does not cut the deficit and the excesses of the public sector, the stagflation risk we have discussed numerous times will be a reality. The United States administration has to do what is necessary to curb its fiscal imbalances and do it quickly, because the situation is not just unsustainable from a fiscal perspective but also a danger to the U.S. dollar."

Lacalle then concluded: "Market participants will need more than rate cuts. We need to see real rates falling, inflation under control, and the deficit slashed. The Fed's policy mistake happened in 2024. They have created the current turmoil. Investing needs to be focused on real fundamentals and less on following the money printers, because the problem of monetary destruction is much larger than the alleged benefits of multiple expansion."[5]

(Source: Global Times)

Below is the article by CCP mouthpiece Global Times, titled: "GT Voice: With looming recession fears, U.S. leverage in tariff policy weakens":

"The Disruption And Restructuring Of Supply Chains Caused By Tariff Wars Have Amplified Economic Uncertainty"

"As the U.S. tariff policy continues to pile ever-growing pressure on the U.S. 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 U.S. 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...that once the U.S. 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 U.S. 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 U.S. economy can endure such a large-scale tariff war is not even a matter of debate. The answer is clearly no. Fears of a U.S. 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 U.S. Treasury Secretary Scott Bessent said in an interview that aired... that there are 'no guarantees' there will not be a recession in the U.S., although there could be an adjustment, Reuters reported.

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

"These concerns are not alarmist. They reflect the growing strain on the U.S. economy and financial markets as the tariff war persists. The U.S. 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 U.S. economy. Tariffs increase the cost of imported goods, which directly raises expenses for both businesses and consumers. For U.S. 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."

U.S. Trading Partners "Will Not Sit Idly By"

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

"In essence, while the U.S. may believe it is holding the 'bargaining chip' of tariff pressure in trade negotiations, the negative impact of these tariffs on the U.S. 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 U.S. 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 U.S., it lacks the clout to make the entire world pay for its ill-conceived economic policies. The sooner the U.S. realizes this and abandons its self-destructive tariff policy, the better chance it has of salvaging its economy from the impending recession."