'Surely illegal': Paul Krugman pulls the lid off Trump's new economic scheme

Nobel Prize-winning economist and New York Times columnist Paul Krugman on Tuesday examined President-elect Donald Trump's new threats to slap tariffs on all Canadian and Mexican products — and concluded that he's likely not bluffing.

Writing on his Bluesky account, Krugman downplayed claims that the tariffs are a four-dimensional chess play by Trump to extract new concessions from America's two largest trading partners, which he said "makes little sense on its own terms."

Rather, said Krugman, the more likely explanation is "Trump just wants tariffs — probably because they make him feel that he's being tough — and is making up reasons."

Additionally, said Krugman, the kinds of blanket tariffs Trump is proposing are on shaky legal ground.

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"These tariffs are surely illegal," he argued. "I assume that they would be invoked under Section 232, national security, but the Commerce Dept. guide to when 232 can be invoked clearly says that it's when imports threaten a domestic industry — not because we don't like other stuff."

Krugman also noted the irony of Trump's proposed tariffs is that they would violate the trade agreement with Canada and Mexico that he negotiated during his first term.

"We have a free trade agreement with Canada and Mexico, with a legal process to adjudicate disputes," he wrote. "But I guess we've already decided that Trump is above the law — and never mind the damage to US credibility (we are not a nation that can be trusted to honor agreements)."