US tariffs on Bangladesh clothing a wrong move: Nobel Laureate economist Paul Krugman
“That’s the kind of thing that is disruptive, raises the cost of living for American consumers, [and] does nothing to make us more secure,” he said
Nobel Laureate and US economist Paul Krugman has criticised the United States' imposition of high tariffs on clothing imports from Bangladesh, calling it counterproductive and harmful to American consumers.
"Putting high tariffs on imports of clothing from Bangladesh is exactly what you shouldn't be doing," Krugman said in a recent interview with The New York Times.
"That's the kind of thing that is disruptive, raises the cost of living for American consumers, [and] does nothing to make us more secure," he said.
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He argued that such measures do not contribute to national security and instead increase the financial burden on citizens.
"There is a national security rationale for domestic production, but also for friendshoring and for nearshoring, because the stuff that's close by is a lot easier to secure," he said.
"If that's what we were wanting to do, then we would not be levying tariffs on Vietnam and Bangladesh, and we would certainly not be putting tariffs on Canada and Mexico."
Referring to the broader trade policy approach, Krugman noted that countries naturally specialise in different goods and that trade imbalances are not inherently problematic.
"There's no particular reason to think that these numbers should be balanced country by country," he said.
"So there's a whole discussion and literature in the research on what explains bilateral trade imbalances. But nothing that says that they are ipso facto evidence of foul play, which is what the Trump people seem to believe."
In the interview, Krugman mentioned Robert Lighthizer, former US trade representative, as a knowledgeable figure in the field.
"He's generally regarded, among my friends, as a sort of dark, satanic force in the trade policy debate. But he is respected because he clearly knows his stuff," Krugman said.
He added that Lighthizer's independent stance may have affected his influence in the current administration.
"People assumed he would play a big role in this administration, but he was passed over — and almost for sure, that's because he is independent. He's his own man. He didn't come to this out of fealty to Donald Trump. So he might actually say to the king: No, not tariffs on Bangladesh," Krugman told NYT.
