By Paul Krugman
It’s late 2025, and Donald Trump has done what he said he would do: impose high tariffs — taxes on imports — on goods coming from abroad, with extremely high tariffs on imports from China. These tariffs have had exactly the effect many economists predicted, although Trump insisted otherwise: higher prices for American buyers.
Let’s say you have a business that relies on imported parts — maybe from China, maybe from Mexico, maybe from somewhere else. What do you do?
Well, US trade law gives the executive branch broad discretion in tariff-setting, including the ability to grant exemptions in special cases. So you apply for one of those exemptions. Will your request be granted?
President-elect Donald Trump. On what criteria will exemptions be granted?Credit: AP
In principle, the answer should depend on …