Nobel Prize winning economist Paul Krugman has warned in an interview with Handelsblatt that U.S. President Donald Trump’s policies risk a “rupture of the world trading system.”
“If they really are prepared to start unilaterally imposing tariffs then you could see a lot of unraveling of globalization,” Mr. Krugman said.
He also warned that the stock market rally in the wake of Mr. Trump’s victory has not taken into account the risks posed by a renewed financial crisis and how the U.S. administration would respond.
“What people are not appreciating is the risk of catastrophe coming not from the policies they are planning but on the question how do they react when something goes wrong,” Mr. Krugman said.
The administration does not have an economics team to deal with the fallout from a renewed crisis in the euro zone or an economic crisis in China, he said.
“There is literally no economics team in this White House,” Mr. Krugman said. “Some of the people the president talks to are pretty much crazy,” he added.
But Mr. Krugman said the new U.S. president poses an even bigger risk to the foundations of American democracy.
“Many of us are worried that America under Trump will end up looking like Hungary under [Prime Minister Viktor] Orban, that it will be on paper a democracy but in fact in practice it will have become an authoritarian regime,” Mr. Krugman said.