Paul Krugman slams US tariffs on Bangladeshi clothing
Nobel Prize-winning economist Paul Krugman has criticised the imposition of high tariffs on imports of clothing from Bangladesh, calling it a wrong move.
“Putting high tariffs on imports of clothing from Bangladesh is exactly what you shouldn’t be doing. That’s the kind of thing that is disruptive, raises the cost of living for American consumers, does nothing to make us more secure,” Krugman, who specialises in trade, told The New York Times during a recent interview.
There may be a national security argument for domestic production, as well as for friendshoring and nearshoring, because goods that are closer are easier to secure. “But if that were our goal, we wouldn’t be levying tariffs on Vietnam and Bangladesh, and we certainly wouldn’t be imposing tariffs on Canada and Mexico,” he said.
Krugman said that the trading system, which Donald Trump is now dismantling, was developed with a focus on both economic efficiency and a more enlightened, broader perspective on national security.
He referenced Cordell Hull, F.D.R.’s secretary of state, who believed that strengthening economic links across the free world could promote solidarity among democracies and counter the threat of Stalinism.
“So what we’re doing is tearing up — partially in the name of national security — a policy that was partially intended to enhance national security,” he added.
There’s no question that the U.S. is alienating its allies — or its worthwhile allies — by doing all of this. And in some cases, they’re making common cause with our potential enemies,” he also said.
Krugman also discussed the influence of political figures on trade policy, saying, “We have some direct evidence that’s what’s happened. Peter Navarro, who is sort of Trump’s trade czaar. I don’t know if he is still called that. But effectively, at least according to some of the reporting, he was recruited because they basically sent Jared Kushner out to search through Amazon and find somebody who had written books hostile to China.”
He went on to say that One of the most interesting cases was Bob Lighthizer, a longstanding contrarian and protectionist voice in Washington. While many see him as a negative force in trade policy, he is respected for his expertise. People expected him to play a key role in the Trump administration, but he was overlooked. Likely because he is independent and didn’t align himself with Trump’s views. “So he might actually say to the king: No, not tariffs on Bangladesh.”