Justin Yifu Lin (right), a renowned Chinese economist from Peking University, delivers a speech at an economic salon hosted by the China Public Diplomacy Association (CPDA) in Beijing on April 21, 2025. Photo: Courtesy of CPDA

The US government has grown accustomed to scapegoating other nations for its domestic woes, but such tactics fail to address its own structural issues, prominent Chinese economist Justin Yifu Lin said on Monday, warning that the escalation of irrational tariff policies will ultimately harm not only US consumers and businesses but also the global economy.

Lin made remarks during an economic seminar hosted by the China Public Diplomacy Association on Monday in Beijing, in response to a Global Times inquiry about the impact of the US government's recent sweeping tariff policies on both its own economy and the global economy.

Lin, dean of the Institute of New Structural Economics at Peking University and former chief economist and senior vice president of the World Bank, called for other countries to unite against trade protectionism, return to a rules-based multilateral trading system under the WTO, and promote economic growth through openness and mutual benefit.

Lin emphasized that trade is a win-win endeavor, benefiting all participating nations. However, the US is attempting to shift its domestic struggles onto other countries by waging a trade war, he noted.

"They [US politicians] have always sought scapegoats - just as they blamed Japan in the 1980s, they now point fingers at China. But this approach doesn't solve their real problems," Lin told the Global Times.

The US administration has been aggressively using tariff measures under the guise of "trade imbalance" and "protecting domestic industries," imposing so-called "reciprocal tariffs" on major global trading partners, including China.

Lin criticized the US government's trade policy as fundamentally flawed from an economic standpoint. The approach of slapping heavy tariffs and forcing smaller economies to concede through coercive negotiations ignores the deeply interconnected nature of global trade, and will hurt the US itself, leading to lose-lose outcomes, Lin noted.

If the US-provoked trade war escalates further, the worst-case scenario could mirror the 1929 global economic depression, a crisis similarly triggered by protectionist policies that crippled international trade, Lin warned, saying that the US should remember the historic lessons of the Great Depression.

"Protectionism harms all parties, especially US businesses and ordinary people. US consumers will face reduced purchasing power and higher living costs, as tariffs drive up prices without increasing incomes," Lin said.

He further noted that the US cannot afford to "decouple" from China, as American firms remain heavily reliant on Chinese supply chains and the vast Chinese market, and US consumers also depend on affordable, high-quality Chinese goods.

"Many US companies, including Apple and the chip industry, have openly opposed additional tariffs. Also, ordinary consumers are increasingly turning to Chinese e-commerce platforms like Temu and Shein for cost-effective Chinese products - proof of this reliance," Lin said.

Moreover, Lin warned that the protectionist strategy will inflict a "dual blow" on the US innovation ecosystem. 

On one hand, tariffs shelter uncompetitive domestic sectors, which, even if revived, would require perpetual protection due to higher production costs, ultimately dragging down the US' overall economic competitiveness, according to Lin.

On the other hand, America's competitive high-tech industries could suffer from declining export markets. "Countermeasures taken by other countries would directly shrink the international market share for US high-tech exports, hurting R&D investment and undermining their technological edge," Lin said.

He pointed out that high-tech innovation relies on massive investments, and profitability depends on market scale. For instance, if the semiconductor industry loses access to the Chinese market, its R&D spending would become unsustainable, Lin added.

"Thus, these [protectionist] policies run entirely counter to the goal of 'Making America Great Again,'" Lin stated, noting that tariffs are unsustainable and will eventually be abandoned by the American public and the international community.

Global unity, trade co-op

Speaking on how other nations should tackle the pressure, Lin urged countries to recommit to the WTO's multilateral framework, strengthen regional cooperation, widen market openness and expand trade with each other to mitigate risks.

"Unilateralism will only isolate the US, whose economy accounts for just 15 percent of global GDP. The remaining 85 percent can forge a more stable trade network through solidarity," Lin said. "With confidence and cooperation, we can overcome these challenges."

On the impact of tariffs on China's economy, Lin expressed confidence in China's ability to weather external pressures. "China's economy is primarily driven by domestic circulation, which allows it to absorb external shocks more effectively," he noted.

"China's vast domestic demand is a key advantage, especially amid consumption upgrades, where demand for high-quality, cost-effective goods continues to rise," he said.

Lin also highlighted China's economic scale, technological prowess, and policy flexibility to reallocate production capacity and explore new markets to support long-term growth.

"I remain confident in China's economic prospects. By leveraging our strengths and staying focused, we can meet this year's growth target of around 5 percent despite challenges," Lin said.