Transcript: Krugman Wrecks Trump’s Europe Deal: “Scam on His Voters”
Krugman: Yeah. It’s going to hurt all of us a little bit, but Trump voters are particularly in the class of people who are hurt by what amounts to a sales tax, basically. And they’re not going to get the benefits of reduced capital gains taxes and that sort of thing. So it is a scam on his voters. And again, it’s going to almost surely … put it all together, we’re talking about an anti-manufacturing policy. The Europeans are really mad about this deal. I think the people at the European Commission don’t quite understand how badly a lot of Europeans feel betrayed. But it’s mostly about the optics, which matter. The European Union is a big economic superpower; a little bit smaller than us, but not [by] very much. Trump went and imposed these massive illegal tariffs, and the Europeans had every right under international trade law to retaliate. And instead, the Europeans didn’t retaliate and they offered concessions—which are basically fake concessions, but still. They help Trump create the illusion of a win, and they shouldn’t have done that. Yet another institution collapses in the face of Trump aggression. But in terms of the substance, America didn’t win anything here. The Europeans allowed us to get away with shooting ourselves in the foot. That’s not exactly what I would call a win.
Sargent: Well, Paul Krugman, we’re giving them two to three years to show whether this thing actually is going to work according to Trump’s prescriptions and his predictions. And by the way, if there’s any poetic justice here, it’s that JD Vance, who rhapsodizes constantly about manufacturing, is going to have to be the person who defends this policy if it fails—as it probably will—as he’s running for president. What do you think? That’s going to be actually a pretty serious weight for JD Vance to bear.
Krugman: Well, are you sure that we’re actually going to have an election? Or that Trump is ever going to leave? And by the way, in terms of rebuilding manufacturing, yeah, two to three years. But in terms of consumer prices, we’re talking months, not years. This stuff is going to be showing up. It’s already starting to show up. The anecdotes are a lot clearer than the official statistics, [which] takes time. But people are really going to be seeing it in groceries. They’re going to be seeing it in a lot of the things that ordinary people buy—and not next year but just a few months down the pike.
