A new brief of tariffs from the Trump administration could be the worst yet, according to Nobel Prize-winning economist Paul Krugman.
Krugman warned that new tariffs set to be introduced by the president's team will affect not just U.S. citizens but the world, as he lashes out at NATO for not helping with the war in Iran. The economist believes a proposed tariff on 60 countries, including members of the European Union, Canada, and the United Kingdom, will cruelly hinder economies across the world during a time of domestic crisis.
Krugman wrote, "Trump imposed tariffs on almost every other nation, including islands inhabited only by penguins, by invoking the International Emergency Economic Powers Act. This use of IEEPA was blatantly illegal, and after dragging its heels for many months, the Supreme Court finally agreed with lower courts that the tariffs were, in fact, illegal.
"One important point that isn’t emphasized enough is that in addition to being illegal under U.S. law, the IEEPA tariffs were a gross breach of contract. Most U.S. tariff rates were set in 1995, as part of the negotiations that among other things created the World Trade Organization.
"These tariffs were 'bound' by international agreements, which have almost as much force as treaties. But the U.S. just ripped those agreements up, without even trying to make a case for its actions.
"Now the IEEPA tariffs are gone, but Trump isn’t giving up. On Sunday night he posted a long, falsehood-filled rant about the Court, beginning with a condemnation of its tariff ruling. And while he can’t simply defy Supreme Court rulings — not yet, anyway — his officials have been scrambling for legal strategies to reimpose high tariffs."
Krugman has warned that, despite the Supreme Court intervening on Trump's tariff powers, the worst is yet to come as the administration looks to hinder its allies, enemies, and trading partners with a new round of economic changes.
" Under U.S. law the executive branch has the authority to impose tariffs without new legislation in certain specified circumstances," Krugman wrote. "These include Section 232 tariffs to protect national security, the (spurious) basis for most of the tariffs that survived the Supreme Court’s ruling.
"Trump officials are planning to impose another major round of tariffs using Section 301, designed to cope with unfair foreign trading practices. In particular, they’re proposing tariffs on 60 (!) countries, including Canada, the UK and the European Union, that they accuse of violating rules against international trade in goods produced with forced labor.
"The current U.S. government has, as Trump would say, treated our erstwhile allies very, very badly in multiple ways, with the arbitrary, illegal imposition of tariffs the most consequential. And now those erstwhile allies have no inclination to help Trump out of the Iran trap he created for himself. Funny how that works."