Nobel laureate and economist Paul Krugman suggested during a recent interview that certain tariffs on Chinese vehicles may now be a necessity.
Krugman said Saturday during an interview with Bloomberg Television that he thinks having some “conditional tariffs” on Chinese cars are “probably going to be necessary.”
“I don’t think that the Europeans can allow their auto industry to be totally hollowed out,” Krugman said.
Krugman boards the Trump train. Who could have predicted this? pic.twitter.com/xOmSXCanPZ— Mike (@Doranimated) June 29, 2026
Still, Krugman also noted that he believes completely “shutting out” Chinese vehicles from the market would be a “bad thing” and also “very costly to consumers.”
“But on the other hand, I have been shocked, not only by my own change of mind, but by … some of my colleagues,” he said. “People who are longtime advocates of globalization and free trade, who are saying, ‘okay Europe needs to do [something]’ … really if you like, it’s national security, it’s market disruption, to just allow something as big as the European auto industry to just be overrun, even if consumers would benefit for a while, it’s not 20 years ago anymore.”
Krugman also stated that his stance on tariffs is “a long way from saying that we should have tariffs on everything or that Europeans should have tariffs on everything.” He added that a “much more interventionist position” has now become much more difficult to avoid.
Krugman has previously been an outspoken critic of sweeping tariffs, calling President Donald Trump’s threat to implement higher tariffs on Brazil “grotesquely illegal” in July 2025, NPR reported.
In September 2025, Krugman blasted the Trump administration’s tariff strategy as “complete, utter chaos,” Yahoo Finance reported. Krugman also claimed in a Feb 24, 2026 Substack post that Trump “has the economics of trade deficits fundamentally wrong.”
Trump and Chinese President Xi Jinping reached a “trade and economic deal” in November 2025 which in part states that the U.S. will “lower the tariffs on Chinese imports imposed to curb fentanyl flows by removing 10 percentage points of the cumulative rate, effective November 10, 2025, and will maintain its suspension of heightened reciprocal tariffs on Chinese imports until November 10, 2026,” according to a White House fact sheet.
The White House said in a February 2025 fact sheet that the U.S. imposing tariffs on imports from Mexico, Canada and China is part of a broader effort to hold the countries “accountable to their promises of halting illegal immigration and stopping poisonous fentanyl and other drugs from flowing into our country.”
Additionally, carmakers in China have been vastly outperforming U.S., European and Japanese companies in electric vehicles, battery innovation, design and software, BBC News reported in May.
(DCNF)