The United States' decision to weaponize trade through tariffs will ultimately diminish the country's influence in the global economy rather than strengthen it, said an economic expert in response to U.S. President Donald Trump's new tariff policies on Thursday.
On February 1, Trump signed an executive order to impose a 10 percent additional tariff on goods imported from China. According to the executive order, the United States also imposed a 25 percent additional tariff on goods from Mexico and Canada. For energy products from Canada, the administration imposed a 10 percent tariff.
Speaking to China Global Television Network (CGTN) via video link, Radhika Desai, visiting professor at the London School of Economics, weighed in on the potential consequences of the tariff threat, offering an analysis of its impact on the world economy.
"How is weaponizing trade going to help Trump or the United States? Instead of weaponizing the dollar system there, he is weaponizing trade in order to achieve, God knows, completely sham purposes. But anyway, the overall effect of this will actually be, in my humble opinion, to reduce the weight and importance of the United States in the world economy, because no country can deal with such an unreliable trading partner and economic partner. And more and more, he is creating real incentives for the rest of the world to find alternatives to being economically connected with the United States in every possible way," said Desai.
The expert pointed out that the global trade pattern has changed significantly in recent years, suggesting that a more balanced approach to trade and domestic consumption could be a more equitable path forward.
"Between about the mid 1900s and the mid 2000s, world trade was increasing faster than world GDP. Now, world GDP is growing faster than world trade. What that means is that more and more of what countries produce is being consumed at home. And honestly, people might say, oh, that's a bad thing. It's not such a bad thing, what is the purpose of having a big booming economy like China's, if it is not to make ordinary Chinese people more prosperous in that they're able to consume more and higher quality goods and services that they're themselves capable of producing, and the same applies to other countries. So, I would say that this export orientation and this trade dependence, I'm not saying that trade is not important, but if it goes down to more acceptable level, why starve your own children in order to give goods for nothing to the United States," the expert noted.
Desai also believes that Trump's trade policies are only one manifestation of the economic crisis in the United States.
"I think that Trump's erratic behavior only underlines how much the United States is in crisis. If it's not Trump today, it could be somebody else tomorrow. Because these, as I said, there is no serious economic program. The tariffs are not going to magically re-industrialize the United States, unless there is a serious industrial policy, unless there is serious control over the big U.S. capitalists who are much more interested in making money through speculation and predatory lending than in making money by producing anything. So, unless some very serious measures are taken, and I don't see them being taken remotely by the Trump administration or by the Biden administration," she said.
Trump's tariff strategy to weaken US global influence: expert
