The United States' continuous waving of tariff 'big stick' will only backfire on itself (global hotspot)

Brazilian President Lula announced on July 22 that Brazil will expand its trading partners to cope with the impact of US tariffs and find new ways for its economy based on its own reputation and international market position. Lula stated that the Brazilian government will launch a credit support program totaling 18.5 billion Brazilian reals (approximately 3.7 billion US dollars) to alleviate the impact of US tariffs on Brazilian products and the Middle East situation on Brazilian exports.

The new round of tariffs imposed by the United States officially came into effect on July 24th, replacing the previously expired temporary global tariffs. This policy adjustment is mainly based on Article 301 of the 1974 Trade Law, which imposes tariffs on 60 economies, including China, on the grounds of so-called "forced labor". The US government regards tariffs as an important means to increase fiscal revenue, facilitate the return of manufacturing, and restructure the global supply chain. Has the United States achieved its goal by frequently raising the tariff 'big stick'? This newspaper invites Professor Cui Fan from the School of International Business and Economics at the University of International Business and Economics, and Researcher Wang Peng from the China Center for International Strategic Studies at Renmin University of China and the School of Marxism at Huazhong University of Science and Technology to conduct an analysis.

Tariff revenue is a drop in the bucket

Compared to a potential fiscal deficit of up to $1.9 trillion, the US tariff revenue is only a drop in the bucket and has a very limited impact on fiscal balance

Wang Peng: In terms of fiscal revenue, tariffs have indeed increased the US government's revenue in the short term, but it is difficult to say that stable and sustainable income growth targets have been achieved. The US Treasury Department's June 2026 Monthly Financial Report shows that the net revenue from customs duties for the first nine months of fiscal year 2026 was approximately $163.019 billion, an increase of approximately $55 billion from the same period last year; However, due to the impact of centralized refund payments, the net customs tariff revenue in June decreased to negative $25.556 billion. In February 2026, the US Supreme Court ruled that the International Emergency Economic Powers Act did not authorize the President to impose relevant tariffs, and the focus of the ruling was on the lack of statutory authorization rather than a general declaration that tariffs were "unconstitutional". Subsequently, the US government initiated a refund. Tariffs did not completely eliminate revenue, but the refund of old tariffs significantly offset fiscal revenue and forced the government to use legal tools such as Section 301 of the 1974 Trade Act to maintain taxation. Therefore, the accurate statement is: the goal of increasing income was partially achieved, but the net income, sustainability, and legal stability were all lower than initially expected; It cannot be simply summarized as "making big money", nor should it be called a comprehensive "losing money".

Cui Fan: In the history of the United States, tariff revenue used to account for a relatively high proportion of fiscal revenue, but now tariffs are no longer the main source of fiscal revenue. Prior to 2018, US tariffs accounted for slightly over 1% of fiscal revenue. In the fiscal year 2025 (October 2024 to September 2025), US tariff revenue reached a new high of approximately $195 billion, but accounted for about 4% of fiscal revenue. This includes tariffs such as "equivalent tariffs" under the International Economic Emergency Powers Act (IEEPA). After the US Supreme Court ruled that IEEPA tariffs were illegal, the total amount of IEEPA tariffs and interest that the US needs to refund is about 175 billion US dollars, of which about 90 billion US dollars should be refunded for the 2025 fiscal year for the overseas version of People's Daily Online. In the fiscal year 2026, in addition to the need to refund IEEPA tariffs, there is also a possibility that tariffs imposed under Section 122 of the 1974 Trade Act from February 24 to July 23, 2026, may ultimately be declared illegal and may need to be refunded. Compared to a potential fiscal deficit of up to $1.9 trillion, the US tariff revenue is only a drop in the bucket and has a very limited impact on fiscal balance.

Difficulty in achieving the return of manufacturing industry

The ratio of manufacturing value added to GDP in the United States continues to decline and has already fallen below 10% by 2025. The return of manufacturing industry requires the joint support of infrastructure, technology, talent, energy, and long-term investment, which cannot be quickly achieved solely through tariffs

Cui Fan: The United States has signed a series of so-called reciprocal trade treaties with some trading partners, which include clauses that directly require each other to invest in the United States. In recent years, there has indeed been an increase in investment in manufacturing plant construction in areas such as chips. However, the ratio of manufacturing value added to GDP in the United States continues to decline and has already fallen below 10% by 2025. According to the Manufacturing Return Report by Kearney Consulting, the US Manufacturing Return Index will show significant negative values in both 2024 and 2025. There is no clear evidence to suggest that the US manufacturing industry is returning.

Wang Peng: Based on the existing data, tariffs have not yet brought about the large-scale return of manufacturing industry as claimed by the US government, and the overall effect is limited. However, it cannot be concluded that the US manufacturing industry has completely shrunk based on this. According to data compiled by Reuters from the US Bureau of Labor Statistics, manufacturing employment in the US has been weak for eight consecutive months from April to December 2025, with a cumulative decrease of approximately 70000 jobs; By June 2026, the employment in the manufacturing industry will only increase by about 3000 people that month, and there has not yet been a sustained expansion trend. Tariffs can increase the prices of some imported products and provide protection for a few local enterprises, but the US manufacturing industry relies heavily on imported equipment, intermediate goods, and components, and tariffs can also raise production costs, compress profits, and delay investment. At the same time, data from the Bureau of Economic Analysis in the United States shows that the actual value added of the private goods production industry will still grow by 1.2% in 2025, and data from the Federal Reserve also shows that manufacturing output will increase by 1.3% year-on-year in April 2026, indicating that the manufacturing industry is not in a recession as a whole. Overall, the impact of tariffs on different industries is clearly differentiated: protected industries such as steel may benefit, while industries highly dependent on global supply chains such as automobiles, machinery, and electronics face cost pressures. The return of manufacturing industry requires the joint support of infrastructure, technology, talent, energy, and long-term investment, which cannot be quickly achieved solely through tariffs.

Tools for maintaining hegemony

The attitude of countries around the world towards the US tariff policy is shifting from the initial wait-and-see and bilateral negotiations to a parallel approach of "negotiation, countermeasures, litigation, and market diversification"

Wang Peng: The attitude of countries around the world towards the US tariff policy is shifting from the initial wait-and-see and bilateral negotiations to a parallel approach of "negotiation, countermeasures, litigation, and market diversification".

Reuters reported that Australia, Brazil, and Norway clearly believe that the new tariffs lack basis, and China opposes unilateral tax increases; Brazil has requested consultations with the United States under the World Trade Organization dispute settlement mechanism on July 27th, questioning whether the relevant measures violate the United States' multilateral trade obligations. At the same time, the reactions of the European Union, the United Kingdom, and Switzerland were relatively restrained, as the new tax rates did not break through the previously agreed tariff ceiling with the United States, and the United Kingdom also believed that the treatment of some products had improved. This indicates that countries are not adopting a completely consistent confrontational stance, but rather making differentiated responses based on their own interests.

The impact on the international status of the United States is mainly reflected in two aspects: on the one hand, frequent changes in taxation legal basis and unilateral expansion of tariff application scope have seriously weakened the credibility of the United States and increased doubts among businesses and partners about policy stability; On the other hand, the vast consumer market in the United States still gives it strong negotiating power. Objectively speaking, the influence of the United States has not completely disappeared, but the cost and external resistance of using its influence are increasing.

Cui Fan: The tariff policy of the United States is actually a tool for the United States to use its still dominant hegemonic position to coerce trading partners to help share the cost of hegemony and maintain its hegemonic position in the context of the relative decline of American hegemony. Although some countries and regions have promised to accept high tariffs from the United States, offer low tariff treatment, and make large investments in the United States, the so-called reciprocal trade treaties they have signed are unequal and unequal treaties forced by the United States. Some countries actually do not have the willingness to actively fulfill certain requirements, such as investment requirements for the United States. The implementation of these agreements remains to be observed. Multiple surveys have shown that the positive perception of beauty among the general public in many countries has significantly declined since 2025.