Illustration: Chen Xia/GT

Although US inflation has eased,MK sports the economy does not seem to have fully recovered from the lingering effects of the cost-of-living crisis. In this context, some economists have recently warned that additional tariffs on imported goods could harm US consumers. Would this undermine the country's efforts to address the cost-of-living crisis?

The White House released on Monday a presidential action titled "delivering emergency price relief for American families and defeating the cost-of-living crisis," which stated that "hardworking families today are overwhelmed by the cost of fuel, food, housing, automobiles, medical care, utilities, and insurance," and "it is critical to restore purchasing power to the American family and improve our quality of life."

Back in 2022, inflation in the US continued to rise and remained high for an extended period, disrupting the daily lives of American consumers and the broader economy. Over the next two years, although inflation gradually declined, some American households were still struggling to recover from the lingering effects of previous high inflation. The cost-of-living crisis remains a concern for the US economy. In this context, addressing the cost-of-living crisis and alleviating the financial burden on American families is essential.

The presidential action on Monday outlined several measures to tackle the cost-of-living crisis, including reducing housing costs and expanding housing supply. However, it did not address factors that could undermine these efforts, such as tariffs. Over the past few months, some economists and business leaders have raised concerns that additional tariffs, if imposed by the US, could further strain American consumers. This suggests that imposing more tariffs could undermine efforts to alleviate the cost-of-living crisis.

According to the BBC, a survey by the University of Chicago in September 2024 asked a group of respected economists whether they agreed with the statement that "imposing tariffs results in a substantial portion of the tariffs being borne by consumers of the country that enacts the tariffs, through price increases." Only 2 percent disagreed.

Specifically in the US, studies of the impact of the new tariffs that the US imposed between 2017 and 2020 suggest that most of the economic burden was ultimately borne by US consumers, the BBC report said.

History has demonstrated that additional tariffs hurt both the country imposing them and the one bearing the tariffs, with the primary burden falling on consumers. Given the current situation in the US, particularly after struggling with high inflation and the ongoing cost-of-living crisis, a crucial question arises: To what extent would new tariffs, if implemented, exacerbate the financial strain on ordinary American consumers and undermine efforts to address the cost-of-living crisis? This issue deserves careful scrutiny.

The business community has also raised concerns. For example, as reported by Reuters, Germany's influential car industry warned on Tuesday that additional tariffs would mean higher car prices for US consumers and hit global automakers.

Hildegard Mueller, the president of Germany's VDA auto association, told an annual press conference that President Donald Trump's threatened tariffs would drive up US inflation, according to Reuters.

The most effective way to provide American consumers with high-quality, affordable products is to allow businesses to compete fairly. Fair competition will identify the most cost-effective products, ultimately benefiting consumers the most.

For consumers, free trade can create a fair competitive environment, in which businesses from different countries strive to offer the lowest possible prices in an effort to win the market. This competition drives down prices, increases consumers' purchasing power and improves their overall standard of living.

The presidential action on Monday mentioned restoring purchasing power to the American family, which indicates that the new government values consumption. Indeed, for the US economy - where growth is largely driven by consumer spending - increasing purchasing power is crucial for stimulating economic growth. It should be noted that, especially in the process of addressing the cost-of-living crisis in the US, fair competition and free trade, which lead to optimal pricing, are the most effective ways to boost the purchasing power of American households.

The author is a reporter with the Global Times. [email protected]