In a striking warning, German economist Holger Goerg cautioned that U.S. tariff policies could lead to severe repercussions for the American economy. Goerg, also the director of the International Trade and Investment Research Center at the Kiel Institute, stated that, while the extent of potential recession remains uncertain, it’s evident that the U.S. is inflicting self-harm through these tariffs.
Goerg elaborated that rising inflation and hindered competitiveness are two negative impacts of these tariffs, signalling a slowdown in the U.S. economy. The recent imposition of a 25% tariff on imported steel and aluminium has already spurred retaliatory measures from the EU, which further complicates the trade landscape.
As tensions rise, President Trump has threatened additional tariffs if the EU does not lift its countermeasures. This potential trade war could have dire consequences, with Goerg asserting that “that’s to nobody’s benefit.”
Sceptical about the effectiveness of these tariffs in encouraging manufacturers to relocate back to the U.S., Goerg highlighted how the erratic tariff policies undermine long-term business strategies. This unpredictability discourages investment as companies struggle to plan effectively amidst shifting policy.
Historically, the U.S. has gained from global trade, enjoying lower prices and advanced technologies. However, Goerg noted a retreat from this advantageous position, warning that the global trading system is at a crossroads, jeopardising future cooperation. To maintain stability in global trade, he believes major economies, including the EU and China, must step up their efforts in fostering collaboration.
German economist Holger Goerg warns that U.S. tariffs could severely impact the American economy, leading to inflation and decreased competitiveness. Despite the uncertain outcomes, he highlights the self-inflicted harm faced by the U.S. as a result of erratic trade policies. Goerg stresses that cooperative efforts between major economies are crucial for sustaining global trade stability amid rising tensions.
In conclusion, Holger Goerg’s insights illuminate the potential detrimental effects of U.S. tariff policies on its own economy. As rising inflation and uncertainty cloud the economic future, the fundamental question around the viability of these tariffs looms large. The challenges in international trade are evident, calling for a unified approach from major economies to preserve the benefits of globalization for all involved.
Original Source: english.news.cn
