Fear of 'looking weak' is all that's stopping the US and China from cutting tariffs, Bill Ackman says
Brian Snyder/Reuters
- Bill Ackman said a fear of looking weak is preventing the US and China from cutting tariffs.
- The billionaire hedge fund manager said tariffs should fall to "more reasonable levels" of 10% to 20%.
- He also questioned the belief that China can "win" a trade war with the US.
Billionaire hedge fund manager Bill Ackman has said that China and the United States should dramatically cut their tariffs on one another, and only the fear of "looking weak" is stopping them.
Ackman, the CEO of Pershing Square who supported President Donald Trump during the election, made the comments as imported Chinese goods entering the United States face a 145% tariff and American goods entering China face a 125% tariff.
A 10% baseline tariff on all imports into the United States remains in effect, while Trump has paused his raft of country-specific tariffs.
Ackman, who thanked Trump for announcing a 90-day pause on his proposed "reciprocal" tariffs earlier this month, posted on X on Saturday that tariffs were "very damaging in the short term to companies that rely on China for a large percentage of their goods."
He added China and the United States should reduce tariffs to "more reasonable levels — say 10% to 20% — as quickly as possible."
"The only thing stopping the reduction in tariffs to a more sensible level is the fear on the part of both countries' leadership of looking weak," he said.
"A pause, however, would not be a sign of weakness because it requires both countries to take down their tariffs. It is just common sense," he added.
Ackman also questioned the view that China could "win" a trade war with the United States.
"The problem with this assessment is that, the longer the tariffs persist, the more rapidly every company that has a supply chain based in China relocates it to India, Vietnam, Mexico, the U.S. or some other country," Ackman wrote.
"This is true for US and non-US companies. As a long-term player, China must understand this dynamic," he continued.
Ackman added that whatever happened, companies would no longer be willing to keep their supply chains in China. "That cake is already baked," he added.
Trump and China's leadership made conflicting statements this week about the status of trade talks.
"We're meeting with China," Trump said in an interview with "Time" magazine, which was published on Friday but held on Tuesday.
On Thursday, two Chinese officials said there were no ongoing talks.