Nobel laureate economist Paul Krugman warns that America's "Liberation Day" tariffs implemented by President Trump are failing, giving China the upper hand in the trade dispute. He critiques the tariffs as a betrayal of international trust and criticizes U.S. negotiation strategies. Krugman emphasizes that China is effectively managing its stance while America appears to be losing credibility. The video explores the broader implications of these trade policies and the shifting global economic balance.