Jing Pan

Sun, Jun 1, 2025, 4:07 AM7 min read

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Paul Krugman isn’t one to mince words. The Nobel Prize-winning economist says President Donald Trump’s policies are doing serious damage to the U.S. economy — calling them “crippling” in some cases and a direct threat to what once made America exceptional.

In an interview with Bloomberg Talks on April 8, Krugman blasted the Trump administration’s sweeping layoffs at federal health agencies.

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“The CDC is laying off medical scientists so fast that samples are being left in research with nobody to look after them,” he said. “And since ultimately U.S. technological progress relies a lot on the spillovers from government research, we're actually crippling — [making] America not great again.”

Krugman also criticized Trump’s constantly shifting tariffs, arguing that they’ve created a climate of deep uncertainty — and that alone is enough to hurt the economy.

“[We’ve] never had a situation where you have no idea where the average tariff rate is going to be a few months from now,” Krugman said. “This creates an impossible environment for business. It’s hard to imagine a worse trade policy than what we’re getting.”

Echoing other economists, Krugman believes that tariffs could drive up inflation and drag down growth — but given the unpredictability of Trump’s policy changes, he says the short-term impact could be even worse.

“We may very well now think better than even odds that we are going to have a recession this year,” he warned.

While Trump insists that “tariffs are about making America rich again and making America great again,” Krugman argues his implementation of them is having the opposite effect.

“If you wanted to kill U.S. exceptionalism, this is kind of what you would do,” he said.

The U.S. hasn’t entered a recession, but with markets reacting to trade policy shifts, investors may want to prepare. If you’re concerned about what’s next, here are three easy ways to protect your nest egg now.

While stocks have taken a hit in the wake of sweeping tariffs, one asset has emerged as a bright spot: gold.