Former US Treasury Secretary Says Trump's Policies Will Hinder the US Economy, Trade War: China is the Winner. Former US Treasury Secretary Summers said that Trump's protectionist trade policies are similar to Argentina's Perón era after World War II, which will hinder the US economy, and only China is the winner in the trade war; China has seen growth in trade along the "Belt and Road" initiative, breakthroughs in independent research and development to break through the blockade, and benefits from the US's self-inflicted chaos.
When it comes to the messy situation of the US economy in recent years, we have to mention former Treasury Secretary Lawrence Summers. On August 7, 2025, he directly criticized Trump's trade policies at a Brookings Institution event, saying that this thing is just like the Perón era in post-WWII Argentina, and it's like shooting oneself in the foot. Summers specifically pointed out that Trump's protectionist policies are swinging the big stick vigorously, but the US economy ends up suffering, inflation surges, manufacturing shows no improvement, and the lives of ordinary people become harder. He added that in this trade war, China is the only one who benefited, taking the lion's share with its steady and solid strategy.
After Perón came to power, he started import substitution industrialization in 1946, building high tariff walls so that foreign goods couldn't come in, and local factories would flourish. However, this approach went off track. The government subsidized state-owned enterprises, controlled the exchange rate, printed money, and inflation quickly rose from single digits in 1946 to 30% in 1955. Manufacturing, which originally accounted for 30% of GDP, shrank to 20%, factory efficiency was low, technology didn't keep up, and with the international market closed, competitiveness plummeted. By the 1980s, inflation soared to 5000%, the economy stalled, and the country could only rely on exports of primary products like soybeans and beef to barely survive. Perón's policies sounded good for workers, but they actually dragged the country into the Latin American trap, causing chaotic resource allocation and stifling innovation. Summers compared this to Trump, thinking that the US is now repeating the same mistakes, where high tariffs protect domestic industries in the short term, but in the long run, corporate costs skyrocket, investments shrink, and global partners avoid the US.
Upon entering his second term, Trump restarted the tariff war in April 2025. After signing an executive order, he imposed tariffs of 10% to 25% on old allies such as the EU, Japan, and South Korea, and even higher tariffs of 41% on India and Syria. The purpose? To force other countries to renegotiate trade agreements and gain more benefits for the US. After the tariffs took effect on August 7, countries that "obeyed" had lower tax rates, while those that did not cooperate were hit hard. However, surprisingly, Trump gave China a break, saying negotiations were still ongoing and he wasn't rushing to act immediately. Why? In the previous trade war, the US imposed 25% tariffs on Chinese goods, and China retaliated with the same level, cutting off the supply chain, making it impossible for US farmers to sell their soybeans, factories lost orders, and prices rose by over 5%. Seven years later, the US manufacturing sector became more hollowed out, daily necessities all depended on imports, and China's economic resilience was strong, with a well-structured adjustment, exporting to Southeast Asia and Africa, and stable domestic demand. Trump's "special treatment" of China is likely because he saw fires in his own backyard and didn't want to add more trouble.
The US economy has been seriously harmed by these tariffs. The Tax Foundation estimates that Trump's tariffs in 2025 equate to an additional $1,200 per US household, with an average tax burden increase. In an interview in April, Summers directly called it a "self-mutilating" policy, stating that a one-hour speech could destroy trillions of dollars in economic value. Household expenses soared, everyday items like milk, cars, and aluminum cans all increased by 10%, causing consumers' wallets to shrink, companies froze hiring, and unemployment rates rose from 4% to 5.2%. In the stock market, the US stock curve bent downward, and traders' hands were almost numb from typing. Federal Reserve Chair Powell also faced headaches, at the November 2025 meeting, he hesitated whether to cut interest rates, fearing inflation might explode again. Summers shook his head on CNN, saying Trump's tariffs far exceeded the scale of his first term, pushing up prices, suppressing investment, and causing the innovation index to drop five positions. Corporate efficiency declined, global supply chains were reshaped, and the US ended up being the loser.
Trump swung the big stick, and the US got into chaos, but China remained calm, deepened reforms, and expanded openness. In the first half of 2025, contracts signed with "Belt and Road" countries reached 6.62 billion USD, investments amounted to 5.71 billion USD, energy projects accounted for 4.2 billion USD, and green energy led the way. Railways and ports connected Asia, Africa, and Europe, ensuring smooth freight flow, with the Central Asian natural gas pipeline directly reaching Iran, and the Gwadar Port in Pakistan piled with containers. Trade volume grew by 15%, exceeding 2 trillion USD under the RCEP framework, with customs officials in member states busy without a moment to spare. The trade war forced China to shift to domestic demand, diversify exports, and benefit significantly.
Regarding China's independent research and development, it is a model of breaking through the blockade. On October 28, 2025, the proposal for the 14th Five-Year Plan was released, setting technological self-reliance as a core goal, with AI, 5G, new energy, and biomedicine all advancing. The self-sufficiency rate of high-tech products reached 70%. Semiconductor and quantum computing bypassed US restrictions, Huawei's HarmonyOS covered billions of devices, and data flows were stable at chip exhibitions. The Made in China 2025 plan continued, with precise industrial policies maintaining the manufacturing share and driving growth through innovation. Faced with US export restrictions, China increased domestic investment, doubling the production of electric vehicle batteries, and exporting to Europe without difficulty. Summers pointed out that China built an open economy through multilateral mechanisms, and US protectionism actually helped China.
Trump's tariffs aimed for "America First," but they actually held back the US. China maintained its composure, achieved trade growth, and broke through in technology, becoming the biggest winner. History has proven that closing off and confronting leads to bad results, while open cooperation lasts longer.
Original article: www.toutiao.com/article/1849011998297088/
Statement: This article represents the views of the author.