Paul Krugman, a Nobel laureate in economics and author of the "Paul Krugman" Substack, joins Catalysts with Seana Smith and Madison Mills to discuss US President Donald Trump's tariff implementation delay for Mexico and Canada and the economic impacts of Trump's proposed policies.
"There's a lot of pretense, but yesterday Trump folded," Krugman says. "We got essentially nothing substantive from Canada or Mexico; they basically promised to continue doing things they were already doing."
He adds, "It appears that Trump and his administration lost their nerve ... which is good from my point of view, because [the proposed tariffs were] really destructive."
"The key thing about the Canada and Mexico potential trade war is that the North American economy — three countries — is very, very integrated," Krugman explains. "There is really no such thing as US manufacturing or Canadian manufacturing; there's just North American manufacturing."
"It would have made US industry much less competitive against the rest of the world, and it would have hurt everybody ... I think we just dodged a bullet here," the economist adds.
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Krugman says while tariffs "are a big threat" to the US economy, mass deportations are "even bigger," as they "will cripple agriculture and construction."
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
This post was written by Naomi Buchanan.