Trump's tariffs will not work and will strengthen Lula, says Nobel Prize in Economics

Krugman, who exactly a year ago published a text in which he classified the PIX as "money of the future, points out that the tariffs will strengthen President Lula politically. "Economically, the scope of the tariffs will be limited", he states, citing the Trump administration's fears regarding the prices of coffee, orange juice, beef, among the products - some of the main ones exported by Brazil to the USA. A 2022 US Central Bank report stated that the PIX is a digital currency Getty Images via BBC Krugman, who won the Nobel Prize in Economics in 2008 and is a professor at the City University of New York, claims that the Trump administration is trying to punish Brazil for the success of PIX. "Why is it unfair for a country to offer its citizens a better way to shop and pay bills?", asks the economist in his article. "In a way, the Trump administration is still trying to punish Brazil for being a true democracy", says Krugmann in his text. Jair Bolsonaro, for trying to foment a revolt after losing the last election", continues the economist. Krugman had already published an article in which he stated that Brazil may have invented the money of the future Getty Images via BBC In his article, the economist also states that Trump's hostility towards the PIX illustrates the same position of the US president in relation to energy policy. "This government opposes progress, whenever progress goes against the interests and ideology of the oligarchs who invested money in Trump's campaign and the your pocket", he says. Krugman also cites a report from the Fed (the US Central Bank) from 2022, which states that the PIX is a digital currency from the Central Bank of Brazil, "analogous to paper money". The economist also questions: "But since when is it an unfair commercial practice for a company to lose customers to a competitor that offers a better and cheaper product?". And he continues, with the question: "We should close the US postal service because it offers a better and cheaper delivery service cheaper than UPS and FedEx?" In the article, Krugman mentions that the Trump administration would be concerned that PIX and other similar payment systems would challenge the international hegemony of the dollar. But, for the economist, Brazil is an actor "too small to have an impact on the global payments system." However, argues Krugman, the dollar could face a real challenge if the European Central Bank manages to adopt a digital euro in 2029, as planned. "If that happens, it is not difficult to imagine that a significant number of transactions previously made in dollars will now be made in digital euros", writes Krugman. The Nobel Laureate in Economics continues: "the reason people may opt for the digital euro is because the US will not offer an equally good means of payment. Why won't there be a digital dollar?", he asks. And he himself answers. "Not because it's a bad idea - as Brazil demonstrated, it would be a great idea. But there are powerful interest groups that oppose any such initiative. In the conclusion of his article, Krugman cites the argument of Brazilian economist Monica de Bolle, for whom tariffs strengthen the position of the Brazilian government. In an interview with BBC News Brasil last week, De Bolle assessed that the impact of Trump's tariffs should be restricted. "But the evident senselessness of these new tariffs will not prevent them from happening. The Trump administration has declared war on the future", concludes Krugman, stating that the US president never admits when his wars fail.