Bill Ackman Warns Trump's Tariffs Could Trigger Economic Nuclear Winter

Bill Ackman, the founder of Pershing Square Capital Management, has issued a stern warning to U.S. President Donald Trump regarding his tariff plans. Ackman believes that Trump should consider announcing a 90-day suspension of the implementation of "reciprocal tariffs" to allow for negotiations and the resolution of "asymmetric tariff agreements." This, Ackman argues, would attract tens of billions of dollars in new investment into the country. He cautions that if this does not happen, the U.S. economy could face severe consequences, potentially leading to an "economic nuclear winter."

Ackman's warning comes at a time when the U.S. economy is already facing significant challenges due to the ongoing trade war with China. The implementation of reciprocal tariffs could exacerbate these challenges, leading to a further slowdown in economic growth and potentially causing a recession. Ackman's call for a 90-day suspension of tariffs is aimed at providing a window for negotiations and the resolution of trade disputes, which could help to stabilize the economy and prevent a more severe downturn.

The potential impact of Trump's tariff plans on the U.S. economy is a cause for concern among many economists and business leaders. The implementation of reciprocal tariffs could lead to a significant increase in the cost of goods for American consumers, as well as a decrease in exports and a loss of jobs in industries that rely on trade. This could have a ripple effect throughout the economy, leading to a decrease in consumer spending, a slowdown in economic growth, and potentially a recession.

Ackman's warning is a reminder of the potential consequences of Trump's tariff plans and the need for a more measured approach to trade policy. The implementation of reciprocal tariffs could have significant and far-reaching effects on the U.S. economy, and it is important for policymakers to consider these potential consequences and take steps to mitigate them. By suspending the implementation of tariffs for 90 days, Trump could provide a window for negotiations and the resolution of trade disputes, which could help to stabilize the economy and prevent a more severe downturn.

In his statement, Ackman praised Trump's strategic approach to repairing the nation's trade system, acknowledging that the U.S. fully supports Trump's efforts. However, he also expressed concern that the imposition of massive and disproportionate tariffs on both allies and adversaries could undermine global confidence in the U.S. as a reliable trading partner, investment destination, and financial market. This, in turn, could lead to a global economic war, stifling business investment, causing consumers to tighten their belts, and severely damaging the U.S.'s global reputation, which could take years or even decades to repair.

Ackman further warned that in the event of an economic nuclear winter, no CEO or board of directors would be willing to make significant, long-term economic commitments in the U.S. He predicted that if the market collapses, new investments will halt, consumers will stop spending, and businesses will have no choice but to cut investments and lay off workers. Despite the Trump administration's attempts to downplay the impact of the tariff policy, Ackman believes that if the negative effects spread, both small and large businesses will suffer. He anticipates that prices in the U.S. will rise, as almost no company can instantly pass on significantly increased costs to customers, even if they are debt-free. The entire business system is heavily leveraged, he noted.

Ackman also cautioned that Trump's tariff plans could backfire on his supporters, stating that this was not the outcome they voted for. He urged Trump to halt the tariff policy on Monday and use the time to fix the unfair tariff system. Otherwise, the U.S. could face a self-inflicted economic nuclear winter.