Bill Ackman Warns Tariffs Could Lead to ‘Economic Nuclear Winter’
Billionaire investor Bill Ackman, who is notably backing Donald Trump’s 2024 presidential run, has sounded alarm bells over the Trump administration's expansive new tariff strategy. He's painted a pretty chilling picture, calling it an 'economic nuclear winter' if the U.S. doesn’t pump the brakes on these tariffs.
Ackman’s Stark Warning
Ackman, who founded Pershing Square Capital, really went in on the administration’s tariffs, which start with a 10% base rate on more than 180 countries. The biggest eyebrow-raiser? A whopping 54% rate on Chinese imports. Ackman argues that these moves aren’t just aggressive, they could seriously damage the global economy, making it seem like we've launched an economic war against everybody.
He doesn’t mince words, saying this approach is eroding trust among businesses and might even force them to stop investing or get spooked out of spending. And let’s not forget — the U.S.'s international reputation could take a hit that lasts for decades.
In Ackman's view, business thrives on confidence. If that crumbles, we’re in for trouble. He believes the math behind these tariffs is off, four times overestimating other nations’ trade barriers. His solution? Freeze the tariffs and go renegotiate those lopsided trade deals. Otherwise, he fears the worst – a self-made disaster.
Ripple Effects on Global Markets
The tariffs are set to increase even further on April 9, and we can already see some blowback, like China slapping a 34% tariff on U.S. goods. That news has sent global markets into a tailspin, with European and Asian markets taking a dive.
Interestingly enough, Ackman didn’t hold back on critiquing Commerce Secretary Howard Lutnick either. He accused him of having possible conflicts of interest, hinting that Lutnick’s firm could even profit from this economic mess.
And while Trump stands by the tariffs, arguing they’ve pumped billions into the country, and brushes off recession worries, the reactions from other business moguls reveal heightened tension. JPMorgan’s CEO Jamie Dimon mentioned a 60% chance of a recession happening, adding these tariffs could cause inflation to surge and growth to slow.
Similarly, BlackRock’s Larry Fink observed that many CEOs are already acting like we're in a recession, with airlines showing early signs of trouble.
As the debates rage and the economic fallout continues to unfold, all eyes are on what the Trump administration will do next and whether Ackman’s dire predictions might persuade a different course of action.