Paul Krugman Pummels Trump's 'Stupid' 10% Import Tariff Pitch: 'Electing Him Would Mean End Of US Democracy'

Donald Trump and his team reportedly discussed a “universal baseline tariff” on all imports to the U.S. as part of a trade-focused economic plan for his presidential bid. Noted economist Paul Krugman weighed in on the development and said it was such a “bad idea.”

What Happened: Trump called for fixing a 10% tariff automatically for all countries in an interview with Fox News, adding “I think we should have a ring around the collar” of the U.S. economy.

The former president's tariff proposal could be extremely dangerous, economists from ether sides of the aisle said, the Washington Post reported. The move will likely lead to other major economies around the world to conclude that the U.S. cannot be trusted as a trading partner, said Adam Posen, president of Washington-based think tank Peterson Institute for International Economics, the report said.

The average tariff currently was 3% and it varies with countries, with Chinese imports facing an average import duty of 19%, he said.

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Larger Implications Matter: In itself, Trump's “ring around the collar” would cost only a small fraction of 1% of GDP, Krugman said. “It's the larger implications that matter,” he added.

The proposed tariff could lead to the withdrawal of the U.S. from the whole system of rules governing trade, basically “the end of GATT,” the Nobel laureate said. GATT, or General Agreement on Tariffs and Trade, is a set of multilateral trade agreements aimed at abolishing quotas and reduction of tariff duties among the signatories.

It would also mean the end of former President Franklin Roosevelt's system of reciprocal trade agreements that was enacted in 1934, the economist said. This law gives the president the power to negotiate bilateral, reciprocal trade agreements, helping liberalize America's trade policy.

“Trump’s idea is *stupid*,” Krugman said.

The former president is just “peddling crude mercantilism: imports and trade deficits are bad,” he added.

The economist said the tariff wouldn't do much to reduce the trade deficit. “Trump’s bad ideas on trade matter less than the fact that electing him would mean the end of U.S. democracy. But they are indeed bad,” he said.

Trump’s stance contrasts with President Joe Biden, who leaned toward easing tariffs on Chinese imports in a bid to cool inflation that went out of control in the summer of 2022.

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