Transcript: Krugman on How Trump Reveals Deep Contempt for MAGA Voters

As Trump’s tariff scams get worse, economist Paul Krugman explains how he just exposed new levels of disdain for his own supporters—and why MAGA economics is failing so spectacularly.

The following is a lightly edited transcript of the August 25 episode of the Daily Blast podcast. Listen to it here.

Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR Network. I’m your host, Greg Sargent.

The other day, Donald Trump announced that he will reduce tariffs for a huge amount of imported beef as a way to bring down soaring beef prices. At the same time, he’s escalating his trade war with Canada, wildly threatening a whole range of new tariffs for all kinds of products. The new beef policy is already stirring opposition from his own constituencies, like farmers and ranchers.

The war on Canada, meanwhile, will hurt a lot of people in Trump country in other ways. But taken together, these two moves underscore a whole new level of contempt for his own voters. They expose the deep folly of MAGA economics in all kinds of clarifying new ways. So we’re talking about all of it with the best out there at explaining these things, economist Paul Krugman. Paul, good to have you back on.

Paul Krugman: Good to be on.

Sargent: So let’s start with this beef announcement. Trump declared that the U.S. will now allow 300,000 additional metric tons of ground beef product to be imported without an additional tariff. Trump claimed he has a commitment that this beef will be sold at 25 percent below market prices. Paul, can you explain what Trump thinks he’s saying here?

Krugman: The short answer is no. I have no idea what he thinks he’s saying. This is really weird. I mean, the first question is, where’s the beef? Or actually, where’s the beef coming from? This is an amazing thing. He says we’re going to bring in 300,000 metric tons of beef, but won’t say from where. Among other things, with all of these food safety scares, I think people would like to know who’s supplying this beef. And anyway, so that’s kind of weird in itself.

Our beef import policy was pretty weird to start with. It’s a tariff quota, where you bring in a certain amount free of tariff, but then after that it pays a tariff. And this is supposed to be an addition to the quota part. But normally we think of a tariff quota as being, well, the price of beef is set by the marginal ton of beef, which pays a tariff.

So somebody’s getting the right to import a bunch of beef, but it’s not at all clear why this should be passed on to consumers. And now he’s saying, well, he’s got a commitment that it will be sold at 25 percent less. And a commitment from whom? I mean, even if the wholesalers sell it cheaper, how does the supermarket know this is that imported beef that we’re supposed to sell?

So the whole thing is incoherent. I can’t imagine that anybody sat down to try and figure out how this will work. It just has this feeling of, I wanted to say something. And again, contempt. And consumers will not notice it in the supermarkets, but ranchers definitely will.

Sargent: Right. As far as I can tell, we don’t even know at this point which countries this beef will come from, and there’s no clear way that Trump can even guarantee that it will be sold at a discount, can he?

I mean, even if some beef importer said, I’m importing this at a discount because this country is selling it to us for cheaper, would he even be able to guarantee it then?

Krugman: I mean, maybe the beef importer will promise Trump, or promise the officials, that he’ll sell it below the price of other beef. And maybe that would even happen. But then, you and I don’t buy our hamburgers from beef importers. We buy them from supermarkets. And how does any of that happen?

Trump complains about communists, but this is not a communist economy in which the government gets to set the price at which hamburger is sold in the supermarket. So it’s all kind of bizarre. And it’s clearly meant to say, I am doing something, without anybody, as far as we can tell, being clear about exactly what it’s being done or why it should work.

Sargent: Well, what strikes me about all this as well is that it’s yet another admission that Trump’s tariffs actually do raise the prices for American consumers. Trump has insisted 50,000 different ways that other countries pay his tariffs, yet here he comes right out and says that reducing the tariffs will mean lower prices for consumers. I mean, doesn’t that sort of show an extraordinary level of contempt for his own voters?

Krugman: Oh heah. I mean, every bit of the policy from the beginning has been contempt—belief that people will not understand what I’m doing, which is helped by the fact that he himself doesn’t understand what he’s doing. How can you say, foreigners pay the tariffs, and, by the way, I will help you by making them not pay the tariffs?

This does not sound to me like any kind of thought-out policy. This is thrashing. And I would ask, by the way—even if I don’t see how this actually helps consumers—but, you know, what is it, nine weeks till the midterms? The idea that this is going to change people’s views about Trump economic policy, aside from the fact that you’re going to have a few thousand really pissed-off beef........

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