Trump's signature policy poised to 'melt into a puddle of humiliation': Nobel laureate

President Donald Trump's tariff regime looks likely to be killed by the Supreme Court, Nobel Prize-winning economist turned political pundit Paul Krugman wrote for his Substack on Friday — and he has no one to blame but himself.

Trump premised his ability to declare huge new tariffs on countries around the world on the International Emergency Economic Powers Act (IEEPA) — a law that doesn't actually even mention the word "tariffs." On Wednesday, after a monthslong legal battle in which multiple federal courts ruled the scheme illegal, the Supreme Court heard oral arguments on the matter, and it did not go well.

"I’m not an enthusiast for prediction markets because they basically just summarize conventional wisdom. But tracking conventional wisdom is sometimes useful. And the prediction markets’ verdict on Wednesday’s hearing, shown at the top of this post, was clear: it was a disaster for the administration’s case," wrote Krugman, a frequent critic of the president. "So Trump’s signature economic policy may soon melt down into a puddle of incompetence and humiliation. If that should happen, I will celebrate both the end of an extraordinarily bad policy and the Supreme Court’s willingness to (finally!) check Trump’s authoritarian behavior."

That said, Krugman added, the Supreme Court appears set to decide the case as a narrow separation-of-powers issue by defining tariffs as taxes — which is "fair," he said, but misses a much bigger point that the courts shouldn't let slide.

"The Emergency Powers Act only empowers the president to act in response to economic emergencies. And while the White House has declared two such emergencies —trade deficits and fentanyl — the [Court of International Trade] found that neither declaration provided a plausible rationale for the actual tariffs Trump imposed," wrote Krugman. Put simply, "supporting Trump’s tariffs requires engaging in doublethink. You have to believe Trump’s assertions that everything is wonderful, that this is the best economy ever. But you also have to believe that we’re facing an economic emergency that justifies massive tariff increases, hitting almost every nation and abrogating generations’ worth of international agreements."

Ultimately, though, any loss for Trump is a win for the nation, Krugman concluded.

"Regardless of the grounds upon which you object, these tariffs are bad for Americans and bad for the rest of the world," he wrote. "Moreover, the politics and optics are important. Like strongmen in other countries, Trump is trying to consolidate autocratic power. Every defeat he suffers helps undermine the 'resistance is futile' mentality that is an essential part of such consolidations. So if Trump does take a big L here, I will break out the (domestic) champagne."