Paul Krugman on the ‘Biggest Trade Shock in History'
On a scale of 1 to 10, how liberated are you feeling?
We just had Donald Trump's big 'Liberation Day,' when he announced a huge package of tariffs. They were larger, by far, than markets were expecting — which led markets to lose a lot of value in the hours right after. The tariffs were also more confusing than people were expecting.
Trump suggested during his campaign a flat tariff of 10 to 20 percent on all imported goods, and maybe something bigger on China.
But the tariff package he unveiled was very different: There were different numbers for basically every country. And then there was a column listing the tariffs that they had on us, and that column was simply wrong.
So what is going on here? Why is Donald Trump absorbing this much economic pain? Why is he risking a domestic recession — and a global recession — for this package of policies that almost every economist would tell you does not really make sense?
I wanted to talk with my former colleague Paul Krugman about this. Paul is a Nobel Prize-winning economist with a focus on trade. He was a columnist here at The New York Times for 25 years. And he's been writing an excellent Substack, where he has been tearing into the theory behind this kind of tariff policy, as well as the very strange reality that has now been announced, and trying to understand: What led to this package instead of one that might have more cleanly accomplished the goals that Donald Trump and the people around him say they are seeking?
Want all of The Times? Subscribe.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
2 minutes ago
- Yahoo
Texas' proposed congressional map dismantles districts flagged by DOJ
In early July, as President Donald Trump was pushing Texas to redraw its congressional map to better favor Republicans, the Department of Justice sent state leaders a letter. Four of Texas' congressional districts were unconstitutional, the department warned. Three, the 9th, 18th and 33rd, were unconstitutional 'coalition districts,' where Black and Hispanic voters combine to form a majority. The 29th, while majority Hispanic, was also unconstitutional, the letter said, because it was created by its two neighbors being coalition districts. 'It is well-established that so-called 'coalition districts' run afoul of the Voting Rights Act and the Fourteenth Amendment,' assistant attorney general Harmeet Dhillon wrote, threatening legal action if Texas didn't bring the districts into compliance. On Wednesday, Texas House Republicans released their first draft of a redrawn map designed to give the GOP five new seats in next year's midterms. As for the four districts that troubled Dhillon? In the Houston area, the 9th and the 18th districts, where no one race currently constitutes a majority of eligible voters, would be redrawn as just over half Hispanic and half Black, respectively. But as a result, the nearby 29th District — a fixture of east Houston's Latino community — would lose its Hispanic majority, becoming 43% Hispanic, 33% Black and 18% white. The 33rd District in North Texas, although entirely redrawn, would still have no single racial or ethnic group that constitutes a majority. Texas has long maintained that it drew these maps without an eye toward race. But tinkering with the lines now that these racial concerns have been raised risks triggering a Voting Rights Act complaint, legal experts said. States generally cannot redraw districts based on race without a compelling argument that it's necessary to protect voters' ability to elect their candidates of choice, said Justin Levitt, a redistricting expert at Loyola Law School. 'It sure seems like they have actually done what the DOJ, without any basis, accused them of,' Levitt said, noting that he had not done sufficient analysis to say for sure. Legal experts say the DOJ's interpretation of the law around coalition districts, and thus its legal threats to Texas, are based on faulty logic that could be backing the state into a discrimination lawsuit. 'Nothing in this decision suggests, much less holds, that the VRA prohibits the very existence of coalition districts,' Ellen Katz, a redistricting expert at the University of Michigan Law School, told the House redistricting committee at its first hearing last week. 'There are hundreds of these districts nationwide in which jurisdictions relying on traditional principles create these districts.' Coalition districts Section 2 of the Voting Rights Act of 1965 says states cannot engage in election or voting practices that dilute the electoral power of voters of color, including by packing them into a single district or diffusing them throughout multiple. For decades, courts held that states can satisfy the requirements of Section 2 by creating districts where multiple politically cohesive racial voting groups constitute a majority. Currently, Texas has nine districts where no one racial or ethnic group has a majority; in eight of them, Black, Hispanic and Asian voters combined create a majority. In 2024, the 5th U.S. Circuit Court of Appeals, which hears Texas-based cases, reversed a prior ruling and said coalitions of different racial or ethnic groups within one district cannot claim their rights have been violated under Section 2 of the Voting Rights Act. Citing this ruling, Dhillon told Texas that its coalition districts were 'nothing more than vestiges of an unconstitutionally racially based gerrymandering past, which must be abandoned, and must now be corrected by Texas.' But this reflects a misunderstanding of this case, legal experts say. Under this ruling, the Voting Rights Act can't require states to create coalition districts, but that doesn't mean coalition districts are inherently unconstitutional. 'All it says is that you don't have the affirmative obligation to purposely create [a coalition district] at the outset,' said Mark Gaber, a lawyer with the Campaign Legal Center who is representing a group of plaintiffs in an ongoing lawsuit against the current maps. 'It certainly doesn't say, go through the map and eliminate all of the ones you drew.' Texas leaders have contradicted themselves and each other on the question of whether the state has coalition districts and what should be done about them. Gov. Greg Abbott, days after receiving Dhillon's letter, included redistricting on his agenda for the Legislature's special session, citing 'constitutional concerns raised by the U.S. Department of Justice.' He later told Dallas' Fox 4 News that redistricting was necessary because of the 5th Circuit's ruling. 'We want to make sure that we have maps that don't impose coalition districts while at the very same time ensuring that we will maximize the ability of Texans to be able to vote for the candidate of their choice,' he said. At a House committee hearing Friday, GOP Rep. David Spiller of Jacksboro asked Rep. Todd Hunter, who carried the 2021 maps in the lower chamber, whether Texas currently has coalition districts. Hunter said 'the law was different then.' 'You had coalition districts being interpreted differently,' he said. 'Today, you have a 2024 5th Circuit case absolutely changing the law.' But in court, Texas has long argued it has not drawn coalition districts to address racial disparities, because it draws 'race blind' maps. Attorney General Ken Paxton doubled down on this argument in response to the Dhillon letter. 'The Texas Legislature has led the Nation in rejecting race-based decision-making in its redistricting process — it has drawn its current maps in conformance with traditional, non-racial redistricting criteria to ensure Texas continues to adopt policies that will truly Make America Great Again,' Paxton wrote. At the request of Democrats, the House and Senate redistricting committees have invited Dhillon to testify on the letter and her allegations against Texas, but neither she nor any representative from the DOJ has responded to the request. The Senate panel this week voted not to subpoena her. What happened to the Houston DOJ districts Three of the districts Dhillon cited in her letter are neighbors in the Houston area. All three would be radically redrawn by the House's proposed map. The 9th Congressional District is a multiracial district made up of 45% Black voters, 25% Hispanic voters, 18% white voters and 9% Asian voters. The district, which covers parts of southwest Houston and outlying suburbs, voted for Vice President Kamala Harris in 2024 by 44 points, and has reliably reelected Democratic Rep. Al Green since 2004. Under the House's proposed map, the 9th District has been redrawn around an entirely new part of Houston, retaining just 2% of Green's current district and scooping up conservative swaths of east Harris County. The Hispanic population would climb to just over 50% and the white population would almost double to 34%. Black voters would drop to 12% and Asian voters to 2%. In 2024, this new district would have voted for Trump by 15 points. Green, who is essentially drawn out of his district, condemned the proposal as racist, saying 'the DOJ demanded that the race card be played, and the governor dealt the people of Texas a racist hand.' Republicans pointed to the changing preferences of Latino voters, who swung sharply for Trump and other GOP candidates in 2024, to defend these new lines. 'Each of these newly-drawn districts now trend Republican in political performance,' Hunter said. 'it does allow Republican candidates the opportunity to compete in these districts.' Some of Green's existing district has been pushed into the newly drawn 18th Congressional District. While this was previously a seat with no single racial majority, its electorate would become 50.8% Black, while cutting the Hispanic and white populations. It would also tilt even further to the left; Harris carried the district by 40 percentage points in 2024 and would have won it by a 54-point spread under the new lines. Next door, Rep. Sylvia Garcia's 29th Congressional District would also be reconfigured, with Hispanic residents making up 43% of its new eligible voting population — down 20 percentage points from the current makeup. The district's Black and white populations would increase to create a district without a single racial group dominating. It would become more strongly Democratic. In challenging Texas' maps, plaintiffs have contended that Houston's population justifies two majority Hispanic districts. Instead, the one strong majority Hispanic district has been eliminated, and replaced with a district that is almost exactly half Hispanic, alongside one that is almost exactly half Black. '50.5% is unlikely to perform for Latino preferred candidates, or Black preferred candidates,' Gaber said. 'And they know that. It's a mirage.' What happened to the North Texas DOJ district In her letter, Dhillon also said the 33rd Congressional District ran afoul of the Constitution through its coalition status. The district is currently anchored in Fort Worth, with an electorate that is 44% Hispanic, 25% Black, 23% white and 6% Asian. The district went for Harris by 34 percentage points and has consistently reelected Rep. Marc Veasey, a Black Democrat. A decade ago, Texas, and the federal courts, asserted that the 33rd was not a coalition district. 'District 33 is not a 'minority coalition opportunity district' in which two different minority groups 'band together' to form an electoral majority,' the state and plaintiffs said in a joint advisory to the court. A district court judge agreed, saying it was 'not intentionally drawn as a minority coalition district.' The revised 33rd Congressional District maintains about a third of Veasey's old district, moving out of his Fort Worth base. The proposed new lines would reduce the Hispanic and Black population and increase the white population, while maintaining about the same Democratic lean. Just like in the current map, the proposed 33rd district does not have a single racial group that dominates. Legal experts say that is not inherently a problem, despite what the DOJ letter alleged, as long as voters of color have sufficient power to elect their candidate of choice. At a House committee hearing last week, Nina Perales, the vice president of litigation at the Mexican American Legal Defense and Educational Fund, one of the groups suing over Texas' current maps, testified that the Dallas-Fort Worth area, like Houston, should have an additional Hispanic-majority district on top of Veasey's Hispanic-plurality seat. 'In light of the growth of the population over the past two decades, Section 2 of the Voting Rights Act does require the creation of additional districts,' Perales said. 'If the committee and the legislature decides to take up redistricting, it is certainly true that you cannot subtract from the current level of representation that we have.' Few districts in the Dallas-Fort Worth area went without major changes in the new draft map. In the reshaped downtown Dallas district of Rep. Jasmine Crockett, 50.2% of the voting population would be Black, not unlike the two new Houston districts to inch just past the majority threshold. If Hispanic or Black voters were electing their candidate of choice, there is no legal reason to move more voters of one group into the district to hit a perfunctory benchmark of 50%, Levitt said. 'It tells me you're trying really hard to hit a particular target, such that the target itself was the predominant reason for moving people in or out of the district,' Levitt said. 'That's exactly what the courts have said you can't do.' The lineup for The Texas Tribune Festival continues to grow! Be there when all-star leaders, innovators and newsmakers take the stage in downtown Austin, Nov. 13–15. The newest additions include comedian, actor and writer John Mulaney; Dallas mayor Eric Johnson; U.S. Sen. Amy Klobuchar, D-Minnesota; New York Media Editor-at-Large Kara Swisher; and U.S. Rep. Veronica Escobar, D-El Paso. Get your tickets today! TribFest 2025 is presented by JPMorganChase. Solve the daily Crossword
Boston Globe
3 minutes ago
- Boston Globe
Trump says he ordered subs repositioned in rare nuclear threat to Russia
Advertisement Because nuclear submarine movements are among the Pentagon's most closely held tactical maneuvers, it will most likely prove impossible to know if Trump is truly repositioning the submarines or just trying to make a point. But in Trump's sudden and escalating confrontation with Russia over Ukraine, it is the first time he has referenced the US nuclear arsenal, much less threatened to reposition it. Trump said Thursday that he intends to impose new sanctions on Russia over its unwillingness to wind down its war in Ukraine, the latest step in his gradual shift toward a more antagonistic stance toward the Kremlin. Still, such public flexing of nuclear muscles is rare even for Trump, who last made explicit nuclear threats to Kim Jong Un of North Korea early in his first term in 2018. At that time, he said his 'nuclear button' was 'much bigger and more powerful' than Kim's. That exchange ultimately led to a diplomatic opening to Kim, three meetings between the two leaders, and a complete failure of the effort to get the North Korean leader to give up his nuclear arsenal, which is now larger than ever. Advertisement But Russia is a different case, and Trump has often talked about the fearsome power of nuclear weapons, something he contends he learned about from an uncle who was on the faculty of the Massachusetts Institute of Technology. So while Russian President Vladimir Putin has made threats about putting nuclear forces on alert during the opening days of the Ukraine war, and may have been preparing to use a tactical nuclear weapon in fall 2022 against a Ukrainian military base, the US has never responded. Medvedev is a good foil for Trump; he regularly issues threats against the United States but is essentially powerless. Trump has referred to Medvedev's martial-sounding statements several times in the past week. It was not clear what kind of nuclear submarines Trump was referencing. The US has nuclear-powered attack submarines that search for targets, but it also has far larger, nuclear-powered, and nuclear-armed submarines. Those don't need to be repositioned; they can reach targets thousands of miles away. Kingsley Wilson, the Pentagon press secretary, referred all questions about Trump's statement to the White House. This article originally appeared in
San Francisco Chronicle
3 minutes ago
- San Francisco Chronicle
Trump administration cuts $300M in UCLA research funding over antisemitism claims
The Trump administration has suspended more than $300 million in federal research grants to UCLA, citing the university's alleged failure to address antisemitism and discriminatory practices on campus. The move, part of a broader crackdown on elite universities, marks the most severe funding cut in UCLA's history. According to government letters obtained by multiple news outlets, agencies including the National Science Foundation, National Institutes of Health and Department of Energy are halting hundreds of active grants. Officials allege the university engaged in 'race discrimination' and 'illegal affirmative action,' and failed to prevent a hostile climate for Jewish and Israeli students, following campus protests over the Gaza war. Attorney General Pam Bondi said Tuesday that UCLA would 'pay a heavy price' for its 'deliberate indifference' to civil rights complaints. A 10-page letter Tuesday from the Department of Justice to UC President Michael Drake said the DOJ had looked into complaints of discrimination since Oct. 7, 2023, the day Hamas attacked Israel, leading to the Israel-Hamas war in Gaza, which sparked protests at college campuses across the U.S. The letter cited 11 complaints from Jewish or Israeli students regarding discrimination between April 25 and May 1, 2024, while pro-Palestianian protesters occupied an encampment on the UCLA campus. 'Several complainants reported that members of the encampment prevented them from accessing parts of the campus,' the letter said, and some reported encountering intimidation or violence. The Department of Justice set a Sept. 2 deadline for the university to begin negotiations or face legal action. 'Federal research grants are not handouts,' he wrote Thursday. 'Grants lead to medical breakthroughs, economic advancement, improved national security and global competitiveness — these are national priorities.' The freeze affects more than 300 grants, with nearly $180 million already distributed, and follows similar enforcement actions against Harvard, Columbia and Brown universities. UCLA recently agreed to a $6.5 million settlement with Jewish students and a professor over claims of discrimination during 2024 campus protests. Frenk, who is of Jewish heritage, emphasized the university's efforts to combat antisemitism, including the creation of a campus safety office and an initiative to fight antisemitism and anti-Israel bias. 'Antisemitism has no place on our campus, nor does any form of discrimination,' he wrote, while insisting the funding cut 'does nothing to address any alleged discrimination.'
