Jeffrey Sachs slams Trump’s trade policies, warns India against over-concessions

Renowned economist and policy expert Jeffrey Sachs has launched a scathing critique of U.S. President Donald Trump’s tariff-based trade strategy, labeling it the hallmark of a “Mickey Mouse country.”

In a recent interview with NDTV, Sachs discussed the broader implications of Trump's economic decisions, particularly their impact on global partners like India.

Sachs argued that Trump’s perspective on trade deficits is fundamentally flawed. “It is dramatically wrong and oversimplified to the point of being ridiculous,” he said, explaining that such deficits arise when a nation spends more than it produces, not because other countries are “taking advantage” of it.

He further pointed out that the U.S. trade deficit is fueled by a persistent and growing budget deficit, something Trump has failed to address. “If [Trump] wants to get the trade deficits down, he has to get the budget deficit down,” Sachs said. “But he seems intent on not doing that.”

The economist criticised the so-called “Big Beautiful Bill,” which he said only worsens the fiscal situation. Sachs noted that the legislation is packed with tax breaks for preferred groups, increased defense spending, and a ballooning national debt—factors that, in his view, will deepen the country’s trade imbalance.

Trump's tariff-heavy policies were designed to balance trade by creating what he described as a “level playing field.” However, Sachs warned that such tactics could backfire and have damaging effects on allies and trade partners. Speaking on India's ongoing trade negotiations with the U.S., he cautioned against making excessive compromises.

“I think India has other alternatives and should not do somersaults to try to satisfy the United States in particular,” Sachs said. “It should not discriminate against its other trade partners. It should not make concessions to the United States that undermine the most favoured nation principle of international trade.” He concluded, “India should watch itself so that it doesn't get sucked into the US game.”

Sachs also reflected on the growing concern within U.S. financial circles about a potential recession. While he believes the U.S. economy wasn’t inherently heading toward a downturn, current policies could lead to a “self-inflicted recession or economic crisis.”

Adding to the controversy is a public spat between Trump and Elon Musk, who called the “Big Beautiful Bill” a “monstrosity.” Sachs didn’t mince words, stating, “Here you have the richest economy in the world, but it just can't behave in a rational way.”

Projections show that the bill could increase the U.S. national debt by at least $2.4 trillion over the next decade, raising serious concerns about the long-term viability of the country’s economic policies.