The DSR Network Best of the Daily Blast: Paul Krugman Brutally Wrecks Trump’s Europe Deal: “Scam on His Voters”
Jan 2, 2026
Paul Krugman, a Nobel Prize-winning economist and New York Times columnist, dives deep into the recent U.S.–EU trade deal touted by President Trump. He dismantles the narrative of a big win, revealing that the deal is laden with illusory concessions that chiefly burden lower-income consumers. Krugman argues it’s a scam targeting Trump's own supporters, highlighting how the structure of tariffs could harm U.S. manufacturing. He critiques media portrayal of the deal and underscores the unrealistic $600 billion investment promises.
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Inputs For U.S. Manufacturing Rise
- Many intermediate goods and machinery used in U.S. production come from Europe and will face higher costs.
- Krugman argues the deal tilts the playing field against U.S. manufacturing by raising input costs.
Trade Deficit Is About Capital, Not Tariffs
- The U.S. trade deficit mainly reflects capital inflows, not product competitiveness.
- Krugman says tariffs won't reduce the trade deficit because it's driven by investment flows keeping the dollar strong.
Tariffs Can Backfire On Manufacturing
- Tariffs often raise costs of inputs more than they protect finished goods, hurting domestic manufacturing.
- Krugman notes prior tariff episodes cost U.S. manufacturing jobs and this round repeats that mistake at larger scale.