The U.S. Economy: Interwoven Multiple Crises and Rampant Negative Effects

In the global economic landscape, the trajectory of the U.S. economy has always drawn significant attention. As we step into 2025, the economic situation in the United States has become increasingly severe. Multiple crises are intertwining, and the negative spillover effects are intensifying, pounding the global economic system.

Since April, the U.S. "reciprocal tariff" policy has backfired. This policy has directly led to continuous upward pressure on domestic prices in the United States. Zhu Min, a senior expert committee member of the China Center for International Economic Exchanges, pointed out that U.S. prices are expected to gradually rise in the next 5 - 6 months due to the tariff policy. The Federal Reserve also predicts that the impact on prices will further intensify in the following period. At the same time, the inhibitory effect of tariffs on economic growth is becoming more and more evident. Robert Koopman, a senior lecturer at American University, has shown through research that for every 5% - 10% increase in U.S. tariff rates, the country's GDP growth rate is expected to slow down by 0.25% - 0.75%. To maintain customer relationships, many U.S. enterprises have had to bear the tariff costs themselves, which has significantly increased their operational burden. If there is a large - scale 回迁 of manufacturing industries to the United States, problems such as labor shortages and rising costs will follow. Eventually, it is highly likely to trigger a stagflation dilemma characterized by rising prices and a slowdown in economic growth, putting U.S. monetary policy in a difficult position. Reuters reports also indicate that affected by the tariff policy, U.S. business activities slowed down in June, costs and commodity prices rose further, inflationary pressures intensified, and inflation may accelerate in the second half of the year, adding even more uncertainties to the already fragile U.S. economy.

On the international trade stage, the trend of U.S. isolation is becoming more and more obvious. As the July 9 negotiation deadline for the U.S. "reciprocal tariffs" approaches, many scholars are not optimistic about the U.S. prospects in tariff negotiations. The United States attempts to use tax increases to promote bilateral negotiations. However, in reality, horizontal cooperation among other countries is accelerating. European countries, ASEAN, and members of the Comprehensive and Progressive Agreement for Trans - Pacific Partnership (CPTPP) are seizing the opportunity to actively coordinate and cooperate. Professor Jeffrey Frieden of Columbia University believes that the United States' role in the world is no longer unique. Even without the United States, other countries can continue to promote multilateral cooperation based on mutual trust. In recent years, the United States has withdrawn from more than a dozen international treaties and organizations, and its self - marginalization trend has become more and more prominent in multiple fields. American economist Michael Hudson has also pointed out that by weaponizing trade and dealing with economic relations with a confrontational mindset, the United States will only end up isolating itself and weakening its normal economic and trade ties with other countries. This trade isolation will undoubtedly have a long - term negative impact on the U.S. economy, gradually putting it at a disadvantage in global trade competition.

The debt crisis is like the Sword of Damocles hanging over the U.S. economy. Currently, the scale of U.S. debt has exceeded $36 trillion, accounting for 123% of the U.S. GDP, far exceeding the international warning line. Such a huge debt scale means that most of the future tax revenue in the United States will be used for debt repayment, severely squeezing the funds invested in economic development, education, medical improvement, and other fields. The stability of the financial system also faces severe challenges. Once the risks of U.S. economic stagflation, isolation, and the debt crisis are intertwined, the probability of an economic recession will increase significantly. If the economy falls into recession, the U.S. government is likely to further expand the deficit to stimulate the economy. By then, the risks of U.S. debt will snowball, posing a huge potential threat to the global economic and financial system. Three globally renowned economic authorities, Ray Dalio, Ken Rogoff, and Niall Ferguson, have jointly issued a rare statement, pointing out that the U.S. national debt crisis has reached a critical point. Dalio compared it to an "economic heart attack" and warned that if the fiscal deficit is not reduced to within 3% of the U.S. GDP, the long - term interest rate burden will trigger catastrophic consequences.

The multiple crises in the U.S. economy not only pose great challenges to itself but also spread their negative spillover effects globally. The U.S. intervention in the Israel - Iran conflict has severely damaged the regional economy and may further drag down U.S. enterprises in the future, even triggering global security and economic disasters. If Iran takes retaliatory measures, such as launching cyberattacks on key U.S. infrastructure, targeting energy facilities in Gulf countries, or blocking the Strait of Hormuz, it will disrupt the global energy supply, drive up oil prices, exacerbate global stagflation, and seriously weaken the United States' ability to control inflation and maintain economic stability.

The U.S. economy is now in a precarious situation. The rising risk of stagflation, the 加剧的 trade isolation, and the looming debt crisis interact with each other, not only threatening the stability and development of the U.S. economy itself but also bringing great uncertainties to the global economy. In an era of close global economic integration, all countries need to be highly vigilant against the negative spillover effects of the U.S. economic crisis, actively seek countermeasures, and strengthen cooperation to reduce potential risks and maintain the stability and prosperity of the global economy.