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Paul Krugman Calls Trump's Mexico Tariffs 'Policy By Tantrum'

Paul Krugman interrupts his vacation to say WTF?

So I wake up in my undisclosed location to see fresh policy madness. I think this needs some unpacking to appreciate just how wild it is. 1/

— Paul Krugman (@paulkrugman)

Leave the economics on one side, and consider the supposed legal justification. U.S. trade law gives the president huge discretion to impose tariffs, as long as he is willing to make bizarre claims – i.e., Canadian steel threatens national security 2/

— Paul Krugman (@paulkrugman)

But imposing tariffs without Congressional approval to serve goals that have nothing to do with trade policy – in this case, an immigration crisis that exists only in his mind – goes well beyond even the brazenness of his previous actions 3/

— Paul Krugman (@paulkrugman)

So he's claiming justification under the International Economic Emergency Powers Act, which he claims basically lets him do anything he wants in response to anything he declares to be an emergency. I don't see any limits under this interpretation 4/

— Paul Krugman (@paulkrugman)

Could he, for example, impose punitive tariffs on Swiss watches because Swiss newspapers run cartoons that make fun of him? Why not? 5/

— Paul Krugman (@paulkrugman)

OK, the economics: What we import from Mexico are a lot of consumer items, especially food items, Mexico is a key part of the supply chain in various manufactures, especially autos. So this would hurt U.S. consumers and also hurt competitiveness of U.S. companies 6/

— Paul Krugman (@paulkrugman)

So this would be stagflationary: higher inflation lost jobs. Industry would howl. Also very nasty for U.S. farmers if Mexico retaliates. Plus we are, of course, throwing away any remaining credibility as a negotiating partner. 7/

— Paul Krugman (@paulkrugman)

Do I disapprove of Trump's methods? I don't see any method here. This is policy by tantrum, autocratic and irrational at the same time. I don't know whether it's about Mueller, or the likely release of some tax information, or whatever. I do know that the GOP will do nothing 8/

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— Paul Krugman (@paulkrugman)

Is it as simple as Trump wanting to tank the markets on a Friday so he and his pals can make money? Or to change the subject from Bob Mueller?

Global stock markets tumbled today after President Trump said the United States will impose a 5% tariff on all Mexican imports unless Mexico stems the flow of migrants into the US.

— CNN (@CNN)

Another reason Trump should is for his manipulation of the stock market. Take a look at the past month in the image below. Also, stocks are set to drop an estimated 300 points when markets open today. I wonder how much money Trump is making off all of this.

— Scott Dworkin (@funder)

U.S. Indices on 2019-05-31 at Open
S&P 500: 2,760.54 (-1.02%)
Dow 30: 24,916.95 (-1.00%)
Nasdaq: 7,475.04 (-1.22%)
Russell 2000: 1,485.53 (-0.30%)

— Stock Sentry (@StockSentry)

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