Tariffs impact more on US, experts say

The US-China tariff tensions, escalating over the past month with "reciprocal tariffs" exceeding 100 percent, continue to inflict economic damage on both nations. Experts, however, suggest that the United States faces greater challenges and losses compared with China.

Scheduled talks this weekend in Switzerland offer a potential turning point for the tariff standoff, although experts have tempered expectations.

"I'm not expecting a major de-escalation in the Swiss talks, but both countries might reduce their tariffs to the range of 70 percent — still prohibitive but a welcome signal," Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics, or PIIE, told China Daily.

US President Donald Trump said on Thursday that tariffs on China will come down from 145 percent. "You can't get any higher. It's at 145, so we know it's coming down," he said.

China has a big advantage when it comes to quick readjustment in fiscal policies, Hufbauer said, compared with what he called a slower process in the US Congress.

The US also faces increasing economic pressures.

Major retailers like Walmart and Target project price increases of 5 to 10 percent by midyear, with the National Retail Federation estimating $78 billion more in annual costs to US consumers.

"The tariffs are a blunt instrument. They hurt US consumers and businesses far more than they harm China's diversified economy," said Mary Lovely, a PIIE senior fellow.

In semiconductors, China's huge investment since 2023 has boosted domestic production, with firms like SMIC reporting a 10 percent increase in output in the first quarter, according to Charles Glaser, a senior fellow in the Security Studies Program at the Massachusetts Institute of Technology.

"Within five years, China will succeed in producing advanced logic and memory chips at competitive prices", while US foundries, despite CHIPS Act subsidies, face "uncertain competitiveness" amid rising costs, Hufbauer said.

In green energy, China has redirected lithium-ion battery and solar panel exports to Europe and Southeast Asia.

US clean energy projects face an increase in costs due to reliance on Chinese components, according to the US Department of Energy.

Vulnerability exposed

Agriculture also underscores the US' vulnerability.

Hufbauer expects President Donald Trump to push for more farm subsidies and calls it "a major political problem".

China, on the other hand, has been turning to Brazilian and Argentine suppliers, he said.

Meanwhile, US manufacturers face a 10 percent input-cost rise, RAND's Jennifer Bouey said.

"In my view, China is far better positioned than the US to ride through the trade war," Hufbauer said, citing lower production costs and strong global ties.

Sourabh Gupta, of the Institute for China-America Studies, said China "does not need to be in a hurry to make good", given its leverage.

China's GDP expanded by 5.4 percent year-on-year in the first quarter. Hufbauer described China's strategy of liberalizing trade with other partners while awaiting a US tariff retreat as "a correct stance".

"China has more levers to pull than the US in this trade war," Cornell University economist Eswar Prasad said.

Apollo Global Management, one of the world's largest investment firms, said in a report late last month that the US is facing a self-inflicted economic downturn because of new import tariffs, especially for goods from China.

Agencies and Xinhua contributed to this story.

yifanxu@chinadailyusa.com