Paul Krugman on the ‘Biggest Trade Shock in History’

The Ezra Klein Show

New York Times Opinion

Society & Culture, Government, News

4.6 • 11K Ratings

🗓️ 5 April 2025

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

The tariffs President Trump unveiled this week were both bigger than most people expected and a lot more confusing. These aren’t the flat tariffs he proposed during the campaign. And they aren’t reciprocal tariffs, as he claimed in his Rose Garden speech. So what is Trump actually doing here? I knew my former colleague Paul Krugman would have some thoughts. Krugman is a Nobel laureate trade economist who was a New York Times Opinion columnist for 25 years. He now writes an excellent newsletter on Substack, where he’s been trying to make sense of the theories behind Trump’s tariff policies and, now, their strange reality. Mentioned: “Stop Looking for Methods in the Madness” by Paul Krugman Book Recommendations: The Price of Peace by Zachary D. Carter How Not to Invest by Barry Ritholtz War and Power by Phillips Payson O’Brien Thoughts? Guest suggestions? Email us at [email protected]. You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs. This episode of “The Ezra Klein Show” was produced by Rollin Hu. Fact-checking by Michelle Harris, with Kate Sinclair and Mary Marge Locker. Mixing by Efim Shapiro and Aman Sahota. Our executive producer is Claire Gordon. The show’s production team also includes Elias Isquith, Kristin Lin and Jack McCordick. Original music by Pat McCusker. Audience strategy by Kristina Samulewski and Shannon Busta. The director of New York Times Opinion Audio is Annie-Rose Strasser.

Transcript

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0:00.0	From New York Times opinion, this is the Ezra Klein Show. So scale of 1 to 10, how liberated are you feeling?
0:34.9	Because we just had Donald Trump's big day of liberation, where he announced a huge package of tariffs, larger by far than markets were expecting, which led markets to lose a lot of value in the hours right after.
0:47.1	They were also more confusing than people were expecting. He had suggested in the campaign a flat tariff of 10 to 20% on all important goods, maybe something bigger on China.
0:56.3	But this was very different, different numbers for basically every country.
1:01.0	Then there was a column listing the tariffs that they had on us, and that column was simply wrong.
1:06.4	So what is going on here?
1:08.9	Why is Donald Trump absorbing this much economic pain? Why is he risking
1:13.4	domestic recession, a global recession for this package of policies that almost every economist
1:18.7	would tell you does not really make sense? I wanted to talk to my former colleague Paul Krugman
1:23.7	about this. Paul is a Nobel Prize-winning economist with a focus in trade. He was a columnist
1:28.5	here at the New York Times for 25 years, and he's been writing an excellent substack where he's been
1:32.8	tearing into the theory behind this kind of tariff policy, but then also the very strange reality,
1:38.0	the practical tariffs that have now been announced and trying to understand what led to
1:43.6	this package,
1:45.2	instead of one of the packages that might have more cleanly accomplished the goals
1:48.8	that Donald Trump and the people around him say they are seeking.
1:52.8	As always, my email, Ezra Klein Show at NYUTimes.com. Paul Krugman, welcome back to the show.
2:08.6	Hi, good to be on again.
2:10.3	So let's just start with what Donald Trump actually announced on Liberation Day.
2:17.1	Wow. I think most people thought it was going to be some kind of across-the-board tariff,
2:22.8	the same on everybody, or maybe two or three different types of tariffs.
2:26.9	Instead, he announced this whole complicated different tariff for every country at levels
	...

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