'The Administration Has No Idea What It’s Doing': Paul Krugman Issues Dire Warning About Trump's Looming Trade War
President Donald Trump's looming trade wars aren't the garnering too much media attention, but the economic impacts could be wide-ranging — and they may even have a negative impact on the GOP's chances in the 2018 midterms elections.
But as Paul Krugman warned in an op-ed Monday, Trump will likely resort to scapegoating in an effort to deflect blame from any economic hit the U.S. takes as a result of his naive policies.
And so far, the Trump team has proven itself exceptionally unsophisticated on trade.
"Other countries won’t quickly give in to U.S. demands, in part because those demands are incoherent — Trump is demanding that Europe end the 'horrific' tariffs it doesn’t actually impose, while the Chinese can’t even figure out what the Trump administration wants, with officials calling America 'capricious,'" Krugman writes. "Add in the enormous amount of ill will Trump has generated around the world, and the idea that America is going to get major concessions anytime soon is deeply implausible."
The problem, he argues, is that Trump's top economic advisers include Commerce Secretary Wilbur Ross and trade czar Peter Navarro, who produced a white paper during the campaign on trade policy so bad it "had actual trade experts banging their heads on their desks." Others hired by the administration appear to have a predilection for conspiracy theories.
Such hires don't produce confidence, and they're unlikely to produce coherent policy.
Millions of jobs may be at risk from a trade war, Krugman writes. And while some industries might get a boost from the policies, the disruption caused by the massive shifts of economic activity from one sector to another would be a major shock for many Americans.
So what will happen if and when Trump's trade policies really start to hurt people? Krugman is not optimistic:
What I predict ... is that [the administration] will start seeing villains under every bed. It will attribute the downsides of trade conflict not to its own actions, but to George Soros and the deep state. I’m not sure how they can work MS-13 into it, but they’ll surely try.
The point is that the politics of trade war will probably end up looking like Trump politics in general: a search for innocent people to demonize.
Unfortunately, while Trump lacks many political skills, the one talent he undeniably has is selling a narrative to his base. The question is: Will they still buy his stories even if he's sabotaging their very own livelihoods?