In a recent appearance on MSNBC, Nobel laureate Paul Krugman delivered a stark warning: the U.S. has effectively lost the trade war with the Chinese mainland, and its global credibility is now on the line.
Krugman framed the conflict as a contest of will and leverage, arguing that short-term political gains have come at the expense of long-term reputation, international influence and even the nation’s technological edge. He said the U.S. backed down and traded away its standing for immediate wins.
While the Chinese mainland can pivot to alternative markets and sources, Krugman noted that the U.S. faces deeper structural constraints. The inability to rapidly build a domestic rare-earths industry leaves the country vulnerable and beholden to overseas supply chains.
He also pointed to a lack of clear objectives in the U.S. strategy, criticizing President Trump for alienating allies. Tariffs on Canada over relatively minor disputes, he argued, damaged the U.S. role as a reliable partner on the world stage.
Krugman’s analysis urges a rethink: to restore global credibility, the U.S. may need clearer goals, stronger alliances and investments in critical industries. Otherwise, the trade war could leave lasting scars on its international standing.
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Nobel laureate: U.S. losing trade war, global credibility at risk
cgtn.com
