The U.S. new tariffs on Chinese products will hurt not only China but also the world economy at large, which in return will eventually backfire on the American economic outlook in the long run, a senior Silicon Valley entrepreneur said Friday.
"My feeling is the new round of tariffs will hurt all nations. It actually hurts the global economy right now," Steve Hoffman, a veteran investor and CEO of Founders Space, a leading incubator and accelerator in Silicon Valley, told Xinhua in an exclusive interview.
Hoffman was responding to an announcement by U.S. President Donald Trump on Thursday to place an additional 10-percent tariff on the remaining 300 billion U.S. dollars worth of Chinese imports starting on Sept. 1.
Hoffman said overall the global economy isn't made up of separate countries. "If one country starts to suffer and China is the engine of Asia, and if China really starts to suffer due to these tariffs, that downturn will spread to other Asian countries and then spill over around the world," he cautioned.
"If you look out globally, most of the economies in the world, the European Union and most of Asia right now are suffering," he said. "It's a difficult time for them."
"My fear is that a new round of escalation of the trade war will have an impact globally that will then rebound and affect the United States," he added.
Hoffman pointed out that Trump's new tariffs are already biting into the American economy. "Right now, since the new tariffs happened, the stock market is down," he said.
"It took a big hit after Trump tweeted it out that he's going to escalate the trade war. But if you look at business people around the United States, they are worried. We're worried especially in Silicon Valley, and our industries are at stake already," he complained.
Hoffman cited Apple Inc. as an example, saying the U.S. hi-tech giant is suffering a lot. "Their sales in China are way down."
Apple's third quarter financial results, which were released on Tuesday, showed that its net income fell 13 percent to 10.44 billion dollars, compared to the same quarter of 2018, and the figure went down from 9.55 billion dollars to 9.157 billion dollars in the Greater China Region.
Apple's stock fell 2 percent Thursday and was down another 1 percent Friday.
Hoffman noted that Trump's strategy of exerting maximum pressure in trade talks with China may backfire as China will not back down to the United States.
"If Trump really wants to close a trade deal with China, he has to allow the Chinese government to win in some areas and the U.S. government to win in other areas, and overall reach a better accommodation for both countries," he suggested.
"There is plenty of room for compromise," said Hoffman. "In the long run, trade is beneficial to both of our nations. Both of our nations suffer when there's a trade war going on."
According to Hoffman, American consumers have actually suffered from the trade frictions between the United States and China.
"They are paying thousands of dollars more every year for these tariffs," he said. "The tariffs are not free, (and) they actually raise prices."
On Thursday, several U.S. industry associations voiced their opposition to the White House's plan to impose more tariffs on Chinese imports, arguing that such an action will not facilitate negotiation but only hurt Americans.
"We're concerned that today's action will drive the Chinese from the negotiating table, reducing hope raised by a second round of talks that ended this week in Shanghai," U.S.-China Business Council President Craig Allen said in a statement, in response to Trump's announcement.
David French, senior vice president for government relations at the National Retail Federation, said "the tariffs imposed over the past year haven't worked, and there's no evidence another tax increase on American businesses and consumers will yield new results."
"We are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment," French said.
These additional tariffs "will only threaten U.S. jobs and raise costs for American families on everyday goods," he added.