President Donald Trump’s suggestion of huge new tariffs on foreign imports shook global financial markets.  Billionaire investor Bill Ackman cautioned that the proposal could result in an “economic nuclear winter” and called for a 90-day delay to permit negotiations. Ackman’s warning follows the global economy as it continues to experience headwinds.  Economists worry that the tariffs will make trade tensions even worse and slow down the recovery after the pandemic.

Tariff Tensions Roil Markets as Ackman Urges Pause

Bill Ackman, a billionaire hedge fund manager, who previously endorsed Donald Trump in his presidential elections, has made public his disagreements against the former president’s new trade policies.  In an X post, Ackman referred to Trump’s proposed tariffs as a “massive mistake” that could lead to an “economic nuclear winter.” Ackman called for a 90-day pause on the new tariffs, saying it would give Trump a chance to renegotiate and fix unfair trade deals. He believes this move could help bring in trillions of dollars in new investment. He said that,

“By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital. The president has an opportunity to call a 90-day time out, negotiate and resolve unfair asymmetric tariff deals, and induce trillions of dollars of new investment in our country. 

He further added that,

“If, on the other hand … we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.”

He advised President Trump to retreat from the intensifying trade war and declaring that if left unchecked, it could wreak havoc on the economy. These regulations can potentially severely interfere with supply chains, increase prices, and destroy corporate confidence, causing great economic damage. He further added that, 

“Almost no business can pass through an overnight massive increase in costs to their customers. And that’s true even if they have no debt, and, unfortunately, there is a massive amount of leverage in the system… Business is a confidence game. The president is losing the confidence of business leaders around the globe..This is not what we voted for.”

As per Economic Times, Ackman’s opinions created a firestorm debate in political and financial communities.  Trump critics like billionaire Ross Gerber and former world chess champion Garry Kasparov strongly denounced Trump’s trade policies, terming the proposed tariffs “garbage policy.” Gerber also raised an eyebrow about Ackman’s earlier statement that Trump is pursuing a policy of playing “crazy” during negotiations.

Ackman’s warning has left investors anxious about what’s to come next.  His request for a 90-day tariff moratorium on the further tariffs shows just how serious the threats could be.  Markets are currently fragile, with stocks and cryptocurrency tanking.  Numerous companies fear that these trade policies will adversely affect the economy. Whether or not Trump is listening can have a profound effect on where things go from here.  In the meantime, uncertainty has made everyone hold back.