Source: Global Times    Published: 2025-04-16

By Ding Gang

Senior Editor with People's Daily

Senior Fellow of Chongyang Institute for Financial Studies at Renmin University of China (RDCY)

Since the beginning of the year, economists around the world have increasingly focused on a single term: uncertainty. This seemingly abstract concept now looms over the global economy like an ever-thickening haze. 

Rebeca Grynspan, who is the head of the UN trade agency, recently expressed her concerns over the uncertainty that has swept the global economy, following US' decision to impose a host of tariffs on countries around the world. Such uncertainty is weighing on global economic growth and could spark more serious economic turmoils.

From supply chain disruptions to turbulence in capital markets, from trade frictions to geopolitical tensions, uncertainty is omnipresent, acting like an invisible force that hinders the normal functioning of the global economy. 

A more urgent question that needs to be answered is: Why is uncertainty escalating? What is driving it?

The answer is both simple and complex. 

Simply put, nearly all related discussions point to Washington, particularly its economic and trade policies. The US' tariff measures, often referred to as "Tariff War 2.0," have become the biggest source of risks for global economic uncertainty.

IMF Managing Director Kristalina Georgieva noted in a statement earlier this month that the US' tariff measures represent a significant risk to the global outlook at a time of sluggish growth, meaning it is critical to avoid steps that could further harm the world economy.

At its core, Washington's tariff policy represents a resurgence of protectionism. The logic is simple: By imposing high tariffs on imported goods, it aims to force American manufacturing to return, reduce trade deficits and protect domestic jobs. This sounds like a good idea under the banner of "America First," but the global economy is not an isolated system; it is a highly interconnected network. A disruption in one link can trigger cascading effects. The US tariff approach is akin to randomly severing wires in this network, causing chaos in global supply and industrial chains. Even more concerning, this policy is not solely for the benefit of the US - it comes at the expense of global interests. 

Various institutions and economists in the world have warned that the US' tariff policy will hinder global trade and economic growth, and this loss would not only affect US' major trading partners like China or the EU but would also backfire on the US itself.

The uncertainty triggered by US' tariff hikes is not only reflected in the unpredictability of the policies themselves but also in their damaging impact on global trade norms. The multilateral trading system has been the cornerstone of global economic growth for the past few decades, and Washington's unilateralism and challenges to the World Trade Organization are eroding this foundation.

Washington's trade policy resembles a "no-rules boxing match," where every new tariff is a heavy blow aimed to the global economy. However, when you throw a punch at your opponents, they are unlikely to simply remain passive and endure it. The outcome is more terrifying than a boxing match because no one knows who will be hurt by the next punch.

Yet, while Washington drags the world into a no-rules boxing ring, China across the ocean is injecting stability and predictability into the global economy. 

In recent years, China has actively demonstrated its role as a global stabilizer through a series of policies to expand opening-up and promote cooperation.

Whether advocating for globalization through the Belt and Road Initiative or engaging in international economic and trade negotiations on climate change and the Regional Comprehensive Economic Partnership, China is striving to maintain the openness and stability. These efforts show how China is taking responsibility and navigating global uncertainty. In 2024, despite external pressures and internal challenges, China's GDP growth achieved its 5 percent target, with the total economic output exceeding 130 trillion yuan ($17.8 trillion). The GDP growth target for 2025 is set at around 5 percent. 

Last year, the global economy was in a slow recovery process, and the growth momentum remains weak, yet China's contribution to global economic growth still contributed around 30 percent. 

This highlights the resilience of China's economy and shows how the country is injecting certainty into the global economy through concrete actions. By adjusting domestic policies, expanding domestic demand, and strengthening trade cooperation with other countries, China has successfully withstood external shocks. This calm and rational approach not only prevented further chaos in the global economy but also set an example for other countries to cope with uncertainties. 

Economic policy is more than numbers; it is a test of national credibility.

China has earned the trust and cooperation of more countries through stable policies and an open stance. 

Although the tariff policy of the US government claims to aim at "Make America Great Again," it ultimately forces American consumers and businesses to pay the price for political theatrics, and in reality, it undermines US' international credibility and leadership. 

The year 2025 is a pivotal moment for the global economy. Where does certainty come from? It can only arise from cooperation, rules, openness and order. 

Washington faces two options: to continue wielding the tariff stick, plunging the global economy into a "lose-lose black hole," or to return to the multilateralism table in search of cooperative opportunities. This is not only related to the future of the world economy but also to America's position in the world economy and global standing. Many economists consider China and the US as two major engines of the world economy. People once applauded this metaphor. Yet, today's turmoil caused the by US' tariff policy presents two possibilities: If one engine continues to misfire, the airplane will surely face a crisis; if both engines can coordinate their rhythms, they can certainly propel the world economy toward a brighter future. 

It is hoped that Washington's decision-makers will remember what former Singaporean prime minister Lee Hsien Loong said, the rules-based order and cooperative approach is not an option but a necessity.