In a New York Times column published on the weekend, Nobel Prize-winning economist Paul Krugman warned that Trump’s economic policies go well beyond finances and that he is engaging in a dangerous game that has the potential to destabilize countries.
According to the columnist, Trump’s tariffs are a disaster and that everyone is at risk.
“As far as I can tell, he isn’t getting a single thing about trade policy right. He doesn’t know how tariffs work, or who pays them,” Krugman wrote. “He doesn’t understand what bilateral trade imbalances mean, or what causes them. He has a zero-sum view of trade that flies in the face of everything we’ve learned over the past two centuries. And to the (small) extent that he is making any coherent demands on China, they’re demands China can’t/won’t meet.”
According to the columnist, Trump trade policies have more to do with how he sees the world and how he is viewed as a strong leader in the press.
“Trump’s trade war should correspondingly be seen as part and parcel of his embrace of foreign dictators, lack of respect for our allies, and evident contempt for democracy, at home as well as abroad,” he wrote. “When you’re imposing tariffs on imports of Canadian steel, on the ludicrous pretense that they endanger national security, and are threatening to do the same to German autos, you’re not building a strategic coalition to deal with a misbehaving China. What you’re doing, instead, is tearing down what’s left of the Pax Americana.”
“It’s not just Trump. And it’s not even just Trump plus Brexit,” he continued. The Europeans are also turning out to be a big disappointment….But where the Europeans are weak, Trump is malign. He’s working actively to make the world a more dangerous, less democratic place, with trade war just one manifestation of that drive.”
“And the eventual negative consequences for America and the world will be much bigger than anything we can capture with economic modeling of the effects of tariffs,” he concluded.
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