Billionaires turn on Trump as trade tensions threaten economy
Following turmoil in the capital markets, billionaires who previously backed Donald Trump are beginning to criticise his trade policy, reports "The Washington Post." The newspaper also warns that the U.S. president may trigger a "freeze of the American economy."
What do you need to know?
- Billionaires and corporate CEOs are starting to criticise Trump’s trade policy, which could affect his support among influential business circles.
- Jamie Dimon from JPMorgan Chase warns of inflation and recession as consequences of Trump's tariffs.
- Elon Musk and other business leaders are calling for the removal of tariffs between Europe and America.
After Donald Trump introduced record tariffs on imported goods, many billionaires and corporate leaders are voicing their dissatisfaction.
For several days now, billionaires, CEOs, funds, banks, and even some Republican senators have been making critical comments about the president's decisions. According to "The Washington Post," these are "cracks in Trump’s cheerleader camp." The trade war he has initiated may leave "lasting political scars," the newspaper comments.
"The Washington Post" reports that former supporters of the president, including influential CEOs and Republican senators, are starting to notice the negative effects of this policy. - "The recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession," warns Jamie Dimon, CEO of JPMorgan Chase.
The CEO of the pharmaceutical company Eli Lilly, David Ricks, who until recently approved of Trump’s policy, said on 4th April that the imposition of drastic tariffs will be costly for American companies and will likely force them to reduce spending on research and development and cut jobs.
Even Elon Musk has announced that there should be a "zero tariff situation" between Europe and America and has started to criticise Peter Navarro, the president's trade adviser, who is the main advocate of tariffs in the White House.
What could be the effects of Trump's trade policy?
Trump's trade policy, involving high tariffs, is beginning to alienate corporate leaders. "Without Congressional approval (which the constitution requires), Trump is imposing the highest American trade tariffs since 1909"- reminds "The Washington Post." These tariffs may lead to disruptions in supply chains and shortages of goods, which in turn force companies to lay off employees.
"The Washington Post" warns that Trump's policy could "freeze the U.S. economy." A rise in unemployment and a drop in consumer confidence could lead to a recession. "Households, whose spending accounts for 70% of the U.S. GDP, (...) will begin to postpone spending" - writes the newspaper.
The U.S. economy survived recent crises thanks to the intervention of the Federal Reserve. However, now the central bank will not have room to manoeuvre while trying to fulfil its dual mission - fighting inflation and unemployment.
