By Yin Yeping and Chu Daye-
US tariffs have sparked widespread concern among American industry players, economists and media outlets over potential adverse impact on the US economy that could raise costs and burdens for US businesses and consumers, according to several US media reports.
Highlighting growing concerns in the US, volatility returned to Wall Street on Monday, with most major US indices swinging to significant losses after the US administration dismissed concerns over the possibility of upcoming tariffs causing a recession, according to the Associated Press. Shortly after market opening on Monday, the Dow Jones Industrial Average dropped about 1 percent, while the S&P 500 shed 1.4 percent, CNBC reported.
The Wall Street Journal reported on Sunday that “economists fear that Trump’s tariffs, once they take hold, could have unexpected effects long after he leaves office,” giving the example of US tariffs imposed in 2002 on steel products.
“Designed to protect the beleaguered but politically influential US steel industry, the 2002 tariffs raised costs for companies that used steel in auto parts, metal stamping and more. Though the tariffs were rescinded the next year, the affected companies became less competitive moving forward as they tried to sell their own products abroad,” The Wall Street Journal reported, citing Lydia Cox, an economics professor at the University of Wisconsin-Madison.
In a widely circulated editorial in January, The Wall Street Journal called new tariffs against Canada, Mexico and China “the dumbest trade war in history.”
Some US business leaders are also specifically criticizing the US administration’s tariffs on China.
Sean Stein, president of the US-China Business Council (USCBC), said in a recent statement that while the USCBC applauds the Trump administration’s goal of addressing the illegal trade of fentanyl, “raising tariffs on Chinese products, however, is not the way to achieve that goal.”
“Across-the-board tariffs will hurt US businesses, consumers and farmers and undermine our global competitiveness,” Stein said in the statement.
Best Buy CEO Corie Barry said that the US electronics retailer is particularly exposed to the tariffs, noting that China and Mexico are the two largest suppliers of the company’s products, CBS News reported.
“We expect our vendors across our entire assortment will pass along some level of tariff costs to retailers, making price increases for American consumers highly likely,” Barry said last week.
The new tariffs will affect not only large businesses but also small vendors.
A US citizen dubbed Fey113 complained in a post on RedNote, a Chinese social media platform, that the current tariff situation affects him. As a small business owner specializing in bracelets, he imports chain materials from China to make the bracelets because he cannot afford to pay the higher prices charged by local wholesalers in the US. “I am not happy with that because I am running a sale too,” he said in the post.
Wang Lizong, a member of the National Committee of the Chinese People’s Political Consultative Conference and president of the Guangdong High-tech Industry Chamber of Commerce, said that Chinese exporters have made it clear that US clients will pay for the additional costs.
“I have spoken to many exporters during my extensive field study trips and they told me that it is their US customers who ultimately shoulder the tariff costs, and they will pass the burden on to US consumers,” Wang told the Global Times on the sidelines of the two sessions in Beijing.
A significant portion of China’s exports to the US are classed as intermediate goods, such as electronic components, threaded screws and integrated circuits that are used in the US to produce end use products, Wang noted.
“The US has, to some extent, lost its ability to manufacture these intermediate goods, and it hardly has adequate production lines and a supporting workforce for these items, so further tariff hikes will only increase the costs of a wide range of end products in the US, causing a further rise in the CPI,” Wang said.
In addition to growing criticism within the US against tariffs, some leading US financial institutions have also lowered their projections for the US economy.
Morgan Stanley lowered its 2025 economic growth forecast for the US on Friday, citing a greater impact from tariffs and a still-tight labor market, resulting in higher inflation. The Wall Street brokerage lowered its 2025 US economic growth forecast from 1.9 percent to 1.5 percent, citing weak economic data and tariff concerns. It also lowered its 2026 growth forecast to 1.2 percent from 1.3 percent, according to Reuters.
Federal Reserve Bank of Philadelphia President Patrick Harker has recently warned that risks to the economy are rising, in part due to increasing prices. That fear helped spur the Bloomberg Global Inflation Linked Index, a gauge of investment-grade inflation-linked debt in developed markets, to gain about 5 percent from January 13 through Thursday’s close. Money managers are also flocking to bonds that hedge against inflation amid uncertainty about tariffs and their impact on the cost of living, according to Bloomberg.
However, despite growing criticism and concerns from US businesses and organizations, the US administration appears to be moving forward with its massive tariff plan.
In the latest official response to the tariff policy, US Commerce Secretary Howard Lutnick said in an interview with NBC News on Sunday that the US tariffs on steel and aluminum would still take effect on Wednesday, March 12, while suggesting the administration plans to “implement far-reaching reciprocal tariffs on goods from foreign countries.”
“Concerns in the US about the increased costs from tariffs are very natural and make sense, as the costs added by tariffs do not arise out of thin air,” Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday, urging the US government to heed the voices of the US business community.
