Paul Krugman Says Trump’s Tariff Policy Could ‘Melt Down Into A Puddle Of Incompetence And Humiliation’

• Krugman criticized the Trump administration’s tariff policy for hurting 90 years of efforts that went into U.S. trade liberalization and violating international agreements.
• He also called out President Trump for invoking the International Emergency Economic Powers Act to impose tariffs on countries all over the world.
• However, Krugman said that even if the Supreme Court rules against the Trump administration’s tariff policy, it would create “enormous uncertainty.”

Economist Paul Krugman on Friday stated that the Supreme Court hearing in President Donald Trump’s tariffs case was a disaster for his administration. Krugman criticized the Trump administration’s tariff policy for hurting 90 years of efforts that went into U.S. trade liberalization and violating international agreements.

“Trump’s signature economic policy may soon melt down into a puddle of incompetence and humiliation.”

— Paul Krugman, economist

The 2008 Nobel Prize for Economics winner said that if this were to happen, he would celebrate the end of an “extraordinarily bad policy” as well as the Supreme Court showing willingness to put a check on President Trump’s “authoritarian behavior.”

Executive Fiat

Krugman also criticized President Trump for invoking the International Emergency Economic Powers Act (IEEPA) to impose tariffs on countries worldwide, many of which are close U.S. allies.

“It was clearly not intended to bestow upon the president the right to do whatever he wants,” he said.

The Trump administration declared a national emergency while announcing the “Liberation Day” tariffs on April 2, citing the “large and persistent” trade deficit.

Krugman said that despite the Trump administration’s reasoning for declaring the emergency, the U.S. Court of International Trade did not find it to be a reasonable argument.

The Path Forward

Krugman, however, noted that even if the Supreme Court rules against the Trump administration’s tariff policy, it would create “enormous uncertainty.”

“For Trump won’t give up. Instead, he has already promised that he will try to reimpose the tariffs by using — or, actually, abusing — different legal avenues,” he added, explaining why the fight against tariffs might not end.

Krugman argued that tariffs are bad for everyone – Americans as well as the rest of the world.

Meanwhile, U.S. equities declined in Friday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.87%, the Invesco QQQ Trust ETF (QQQ) fell 1.22%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.52%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘extremely bearish’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.02% at the time of writing.

Also See: Alex Karp Says Palantir’s Most Important Mission Is To 'Prevent Wars': Report

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