Bloomberg Talks
Paul Krugman, Economist/Professor at CUNY Graduate Center Talks Tariffs And The Markets
Apr 8, 2025
Paul Krugman, a renowned economist and NY Times columnist, dives into the tangled web of tariffs and trade wars. He explains how current U.S. tariff policies echo past economic mistakes like the Smoot-Hawley Act. Krugman discusses the urgent need for clear trade policies in a shifting global landscape, emphasizing the impact on unemployment and recession risks. He also advocates for Congress to reclaim its authority over trade, pushing back against presidential dominance and highlighting the possible bipartisan support for reform.
17:15
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Quick takeaways
- The proposed high tariffs could lead to significant economic uncertainty, complicating investment decisions for businesses across the U.S. economy.
- Negotiating trade with resilient countries like China and the EU is challenging, as current strategies may not yield the desired concessions.
Deep dives
Impact of Tariff Policies
The introduction of significant tariff rates is creating a tumultuous environment for the U.S. economy. As outlined, the new tariffs being proposed could potentially be much higher than those from the Smoot-Hawley era, which is concerning given the increased openness of today's economy to international trade. This situation is generating uncertainty for businesses that are now uncertain about future costs, which complicates investment decisions. The specter of such high tariffs is likely to result in a decrease in imports, leading to substantial economic consequences.
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