[Text/Observer Network Wang Yi] While the "barbarians" are crazily swinging the tariff stick at the world, especially imposing three-digit tariffs on China, internal warnings to the Trump administration are frequent.

Many analysts told American media such as CNBC and Politico that once tariffs exceed three digits, it will effectively cut off most of America's trade with China, but it is unrealistic for the U.S. to find alternative sources in a short time. In the end, Americans and the U.S. economy will be hurt, which clearly will not lead the U.S. onto a good path.

Former U.S. trade official Ed Gresser interpreted the three-digit tariffs as a kind of embargo imposed by the U.S. on China, similar to what the U.S. did in the 1950s and 1960s.

Economist Erica York from the Tax Foundation, a U.S. think tank, said that Trump's increase in tariffs on Chinese imports will basically terminate most trade between the U.S. and China.

"It depends on whether the scope of the tariff is narrow or broad, but generally speaking, if the tariff exceeds three digits, most trade will be cut off," York said. She noted that the average tariff rate reaching its highest level since the 1940s would result in a significant increase in costs, hitting the economy, which clearly would not lead the U.S. onto a good path.

CNBC reported that as York made the above analysis, U.S. stocks were erasing some of the gains brought by Trump's policy reversal the previous day, with investor anxiety rising again. By the close of trading, the S&P 500 index fell about 3.5%, the Dow Jones Industrial Average fell 2.5%, and the Nasdaq Composite Index fell 4.31%.

York believed that the market was still unclear because Trump's tariff threats had not completely disappeared, and the situation would not be determined before the end of July.

Video screenshot of CNBC market commentator Jim Cramer.

"I pity what President Trump has done, I really do, but we are not ready yet," analyzed CNBC renowned market commentator Jim Cramer. He said, "We have become addicted to cheaper Chinese goods," and American imports from China cover many products in various industries, including computers, mobile phones, video games, furniture, toys, etc., with major American companies like Apple and HP having extensive production lines in China.

Cramer said that the two economies are closely connected, and tariffs will cause great disruption and severe inflation. It is unrealistic for the U.S. to find alternative sources in a short time.

According to data from the Office of the U.S. Trade Representative, in 2024, the U.S. exported $143.5 billion worth of goods to China and imported $438.9 billion worth of goods from China. Politico reported that U.S. imports from China include consumer goods such as mobile phones, electronics, clothing, toys, as well as equipment and parts used in factories and repair shops. Trump's tariffs will put pressure on American businesses to seek other suppliers to replace them.

Trump has stated that the purpose of imposing tariffs is to encourage manufacturers to produce more products in the U.S. However, The New York Times pointed out that he and his trade advisors also acknowledged that this may mean an increase in the cost of living for Americans in the short term.

The Yale University Budget Lab estimated that Trump's tariffs will have a particularly severe impact on the U.S. textile import industry, with clothing prices potentially increasing by 33% and non-clothing textile prices increasing by 18%. Car prices are expected to rise by 15.8%, meaning that the average price of a car could increase by $7,600 by 2024. Prices of fresh produce may increase by 6.2%, and overall food prices by 4.5%. For consumer electronics produced mainly in China, price increases could also be significant, with the price of new iPhones possibly increasing by over 30%.

The Guardian cited data indicating that if the U.S. imposes a 125% tariff on China, the price of the iPhone 16 might rise from the current $800 to $1,142. "In the end, no industry will remain unaffected by tariffs."

The Economist analyzed that Trump viewed tariffs as a simple tool to achieve multiple goals - narrowing the U.S. trade deficit, rebuilding manufacturing strength, and creating substantial income for the government. However, every point of his judgment was wrong.

Reports said that data from Trump's first term indicate that the actual cost of tariffs was largely borne by American consumers through rising import prices. Moreover, the age-old reality is that tariffs almost never have any significant fiscal impact. Even if import levels remained unchanged, a general tariff of 10% would only provide slightly more than 1/20 of federal budget funds; in fact, import volumes, affected by higher tariffs, would not remain unchanged but would decline. Even following Trump's flawed logic, tariffs cannot simultaneously create a large number of jobs and generate substantial income for the government, which amounts to double-counting their effects.

The Economist said that both Trump and many of his supporters regard the late 19th century as the golden age of the U.S. economy, believing that high tariffs led to strong economic growth. However, this interpretation distorts the facts. The reality is that while distorting history and economics, Trump has led the U.S. and the world into a dead end.

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Original source: https://www.toutiao.com/article/7491892775915471395/

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