A Nobel Prize-winning economist blasted President Donald Trump's hidden machine for ripping off American consumers in a new Substack essay on Monday.
Paul Krugman, who won the Nobel Prize in economics for his work on trade theory, argued in the essay that Trump has effectively hidden the disastrous impact of his tariff regime behind the headlines about the war in Iran. That has allowed him to continue taking money from American consumers and handing it to his billionaire buddies, even though several courts have ruled that his tariffs are illegal, Krugman argued.
"So we have created a machine which rips off consumers when the tariffs are imposed, then hands a bunch of money to corporations when the tariffs are ruled illegal," he wrote.
"So this is really not great stuff, and it’s pretty big. The Trump tariffs have been something like 1% of GDP, and most of them illegal and therefore a ripoff of consumers," he continued. "That’s a big deal. That’s hundreds of billions of dollars that were taken for no good reason."
Krugman also noted that Trump's tariffs have not benefited consumers as he once claimed. Trump previously claimed his tariffs would lead to a resurgence in manufacturing jobs and increase the standard of living for Americans.
"It almost seems beside the point to point out that the tariffs have also failed," Krugman wrote. "All of the things that they were supposed to do rebuild manufacturing — manufacturing employment is down — reduce the trade deficit — the trade deficit isn’t down — haven’t happened. So this was all a really large burden on the U.S. public, completely without any payoff."