Should-Read: Paul Krugman: Subsidies, Spite, and Supply Chains

October 15, 2017
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Should-Read: Paul Krugman: Subsidies, Spite, and Supply Chains: “I’ve been fairly complacent about NAFTA’s fate…

…Not that I imagine that Trump, or for that matter any of his senior advisers, has any understanding of what NAFTA does or the foreign-policy implications of tearing it down. But I thought sheer interest-group pressure would keep the agreement mostly intact…. Breaking it up would be hugely disruptive, and the losers would include major industrial players who tend to have the ear of even Republican administrations. So I thought we’d likely get a few cosmetic changes to the agreement, allowing Trump to declare victory and walk away.

But look what just happened on health care. Never mind the millions who may lose coverage: Trump demonstrably doesn’t care about them. But his decision will also cost insurers and health care providers, the kind of people you might expect him to listen to, billions. And he did it anyway, evidently out of sheer spite…. So is it safe to assume that he won’t screw over much of U.S. manufacturing in the same way? At this point, the answer has to be “no.”… Reasonable people are worried, I think rightly, that Trump’s rage and spite might lead him to start a war. So why not worry that he’ll start a trade war instead (or as well)?

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