Donald Trump holds a signed proclamation regarding polysilicon imports at the White House in Washington on August 6, 2026.
Again, US President Donald Trump imposed tariffs of 10 percent to 12.5 percent under Section 301 of the Trade Act of 1974 on all goods from the top 60 US trade partners, including China and ASEAN countries, in early August, as they have failed to address the issue of "forced labor."
In a recent exclusive interview with South, Dr. Lili Yan Ing, Secretary General of the International Economic Association (IEA), decoded why President Trump would fail to meet his targets for imposing tariffs. She argued that his tariffs would backfire in the US and wouldn't affect the competitiveness of its trading partners abroad. Also, Ing proposed her steadfast points and strategies to counter Trump's high-handed tariff policy.
Trump can't reach his goals via imposing tariffs this round
As Ing observed, Donald Trump touts the idea that levying tariffs on the US's trading partners aims to balance its trade deficits and create jobs for the American people. "President Trump won't achieve any goals that he has sought to frame, and he is selling to the American people," she noted.
As for the external side, tariffs cannot reduce American trade deficits. The total US trade deficit for goods accumulated a record $1.24 trillion in 2025.
On the domestic side, they do not create jobs for Americans. The US unemployment rate has exceeded 4 percent since Trump came to office in January 2025, compared with an average of 3.8 percent from 2021 to 2024.
Prior to Donald Trump's second term, the US GDP stood at $29.3 trillion in 2024 and its per capita GDP exceeded $85,000 according to World Bank data.
The US, in Ing's view, has gone through agriculture and manufacturing, and is now moving to the ladder of services sectors. At the end of 2025, the services sector accounted for 72 percent of US employment. "It is very evident that the US economy has been dominated by the services sector," she noted.
However, there are portions of Americans who are left behind by this development of the US economy.
Ing detailed the issue of rising inequality in the US. World Bank data show that the Gini Index in the US has exceeded 40 since the 21st century, despite the pandemic year of 2021. Only a small number of people in the very narrow sectors of technology, finance, pharmaceuticals and the military have accumulated wealth. Also, a number of US government expenditures go to these high-margin sectors.
"Those issues of rising inequality and misallocations could only be tackled through proper domestic policy and the right fiscal policy, not by attacking other countries," she added.
Tariffs won't weaken China and ASEAN, but will hurt Americans
In contrast to Trump's reciprocal tariffs, which ranged from 10 percent to 150 percent across 180 countries and regions last April, Ing projected that this time the tariffs might be on a much smaller scale, impacting fewer economies under Section 301. However, these tariffs have created uncertainties, increasing risks. These risks will drive up producers' costs, and the resulting higher prices will ultimately be borne by consumers.
"This tariff aggression will hurt not only the global economy, but at the end, it will backfire for the US economy and overall American people," she underscored.
Ing analyzed that tariffs will definitely increase inflation in the US and affect most of the US sectors negatively. If there is inflation in the US, people will experience declining real wages, giving rise to waning welfare for the majority of Americans.
"Tariffs basically are the costs that will be borne by importers. Importers will be bypassing all of the costs to every American people whom he claimed to protect, especially American workers," she added.
A US Congress Joint Economic Committee analysis published earlier this February revealed a net loss of 108,000 manufacturing jobs in 2025. Joseph Stiglitz, a 2001 Nobel laureate, alluded to tariffs being a reason behind the collapse.
Notably, Trump's tariff policy may have a legitimacy issue and incur the risk for his mid-term election. On August 3, 25 Democratic-controlled US states sued the Trump administration, arguing these tariffs are "arbitrary, capricious and contrary to law." "The US president has the right to issue executive orders, but the American people have the right to have their voices," Ing commented.
At the global level, Donald Trump basically attacked 60 trade partners, specifically China and Southeast Asia, as Ing highlighted.
She then elaborated that businesses have implemented the "China Plus One" policy, a supply-chain diversification approach in which firms maintain production or sourcing in China while establishing manufacturing capacity in at least one additional country. China expands its investment, production and networks. Geographically, Southeast Asian countries are China's natural trading and investment partners.
Regardless of Trump's tariffs imposed on China and ASEAN countries, the data back up Ing's confidence in these economies.
According to UNCTAD and World Bank data, global trade in goods and services surpassed $35 trillion in 2025 — a new all-time high — contributing 68 percent of global GDP. China recorded the highest trade surplus ever with $1.2 trillion in 2025. ASEAN countries' goods and services trade volume has accumulated to more than $5,770 billion.
"The results have shown to Donald Trump that no matter how hard he has tried to hit China's and Southeast Asia's economies and other economies in the world, tariffs will not affect their competitiveness," Ing underlined.
Their competitiveness, in her eyes, is determined by the comparative advantage of the economy. The leading commerce in advanced technologies, such as robotics and AI, has provided benefits for China, Southeast Asia and other developing countries in the world.
Best deal with the US tariff policy is no deal
In his latest Op-Ed Trump's New Tariffs Are an Opportunity to Fight Back published by Project Syndicate, Joseph Stiglitz warns that the longer the world gives Trump what he needs, the greater the disaster that awaits us all.
Ing echoed Stiglitz's stance and proposed that countries should not entertain Trump's request. "If no countries care about his requests, he will understand that he is just talking to himself."
Since the beginning of Trump's reciprocal tariffs last April, Ing wrote an Op-Ed Best deal with US Tariff Policy Is No Deal. Once countries entertain his request, the list of tariff demands will keep expanding indefinitely.
She, along with other colleagues at IEA, has been advocating to Southeast Asian countries, Asia-Pacific countries and others to improve their regional supply chains and domestic value added. They diversify their trade and investment partners, not only in trade investments, but also in payment systems.
"It's very important for us to maintain openness and improve intra-ASEAN trade, as well as regional trade and investments," she stated.
In counterbalance to the uncertainty brought by Trump this time, it is very important for ASEAN, China and other countries worldwide to provide certainties for trade and investments.
"We need to ensure that we maintain this openness and certainties to secure that business is operating at the normal pace and we create jobs and maintain this level of wages that people have enough to consume and enough to maintain their welfare prior to this tariff aggression," she added.
Reporter | Zhang Ruijun
Photo | CFP
