by Xinhua writers Qu Junya, Wang Zongnan
BEIJING, March 21 (Xinhua) -- U.S. President Donald Trump's tariff measures have served to not cheer but chill the capital market, businesses and consumers.
The intensive and drastic shift in the White House's economic policies since Trump took office targeted its immediate neighbors (Canada and Mexico), Europe and China. Trump also imposed a 25 percent tariff on steel and aluminum imports.
Trump's moves have triggered immediate retaliatory tariff hikes and other countermeasures, bringing chaos to the global economic landscape. The term "Trumpcession" has been coined to warn against the consequences.
WILL EXTRA TARIFFS WORK?
Will Trump's tariffs help stimulate the U.S. economic growth or work otherwise? U.S. Treasury Secretary Scott Bessent said early this month that the U.S. economy might slow down during a transition time he described as a "detox period" before longer-term gains. On Sunday, he told NBC News that there were "no guarantees" there would not be a recession in the United States during Trump's four-year term.
Meanwhile, Bessent called recent volatilities in the stock market healthy adjustments. However, the capital market follows its own rules. Stocks on Wall Street registered sharp falls for several consecutive sessions, indicating declining confidence in investors and increasing concerns about economic prospects.
Preliminary data showed University of Michigan consumer sentiment for the U.S. plunged to 57.9 in March, the lowest since November 2022 amid mounting inflation, marked in part by continuous surges in egg prices.
In the opinion of Martin Wolf, chief economics commentator at the Financial Times, U.S. tariff hikes are expected to drive up prices, with Trump's goal of a shift to domestic production hardly attainable in the near term.
Also, retaliatory tariffs by other countries are leading to a loss of overseas market profits for U.S. companies and a loss of domestic jobs, with American farmers bearing the brunt, a recent analysis by The New York Times said.
UNCERTAINTIES CLOUD U.S., GLOBAL ECONOMY
A recent co-survey on 49 economists by the Financial Times put the U.S. growth at 1.6 percent for 2025, down from 2.3 percent reported in December, while revealing a near consensus that the unpredictability of U.S. economic policies would repress growth due to resulting declines in consumer and corporate spending.
In a broader sense, Trump's tariff measures are creating trade barriers and immense uncertainties disrupting the operation of the multilateral trading system and global economy, experts have said.
On Monday, an Organization for Economic Co-operation and Development outlook report revised global growth down to 3.1 percent for 2025 and 3.0 percent for 2026 from last December's forecasts, citing increased trade barriers and uncertainties in government policies as major contributing factors.
Trump's radical and aggressive policies pose a risk not only to the U.S. economy, but also to the entire global economy, Nobel laureate and economist Joseph Stiglitz told the German business newspaper HandelsBlatt published last week.
He warned that Trump will drive the United States into "devastating stagflation."
The current scenario in global trade and economy has prompted media mentions of the Great Depression in the 1930s.
"Recession? If Trump goes through with his planned tariffs ... we may be talking about a depression to rival that of the 1930s. The Smoot-Hawley Tariff Act has widely been considered the cause of the Great Depression, and Trump is planning worse," reads a recent comment left by a Canadian reader on The New York Times website.
The June 1930 act increased U.S. tariffs on agricultural imports and more than 20,000 imported goods, exacerbating the economic crisis and disrupting global trade in the decade-long depression starting in 1929.
