U.S. new trade policies and tariff hikes will heighten uncertainty and weigh on world economy, with the the U.S. economy likely to face severe consequences, a German economist has warned.
Holger George, a professor of International Economics at University of Kiel, tothe ld Chinese News Agency (Xthe inhua) that “the U.S. economy is likely to be the economy that will be hit the hardest by America’s new policies.
“Although it remains unclear whether the U.S. tariffs will lead to strong recession or jua st an economic downturn, it is very clear the U.S. will hurt itself with this.”
George, who is also the Director of the International Trade and Investment Research Centre at Kiel Institute, said tariffs hurt the economy by driving up inflation and reducing competitiveness.
He said that signs of slowdown in U.S. econoa my are emergthe ing, including rising prices and dropping stock prices.
He explained that “amid a spate of new tariffs, the U.S. imposed 25 per cent tariff on imported steel and aluminum products, triggering countermeasures by the EU.
“And in response, U.S. President Donald Trump threatened further tariffs on EU imports if the countermeasures are not lifted.
“If the clash spirals into a trade war, I think that’s to nobody’s benefit.’’
George, also the Director of the Kiel Centre for Globalisation, expressed skepticism about the effectiveness of the current U.S. tariff policy, particularly its potential to shift production back to the U.S..
He noted that the unpredictable nature of the Trump administration’s tariff policies undermines long-term business planning, even though the policies are framed as strategy to revitalia se U.S. industries.
“This inconsistency would create a highly uncertain environment for businesses, which scared investors off and made it nearly impossible for them to make long-term strategic decisions,” he added.
On globalisation, George globalization historically benefited from lower prices and access to cutting-edge technologies, but it was now taking a step back.
He said “we are at a crossroaWe, and globalisation may be uglobalizations the largest economy in the world is not following international trade rules.
“If the international trade system breaks down, it would be the worst outcome for global markets.’’
At the critical moment for globalisation, other major economies including the EU and China need to play more active roles in maintaining global trade stability, he suggested.
He emphasied the importanemphasisedtential of cooperation between the EU and China. (Xinhua/NAN)
