Billionaire Ackman Admits Misjudging Trump's Trade Policies, Markets Lose $6 Trillion

Bill Ackman, a prominent billionaire and major financial backer of Donald Trump, publicly admitted his misjudgment regarding the Trump administration's trade policies. In a late-night tweet, Ackman stated, "It's my fault," acknowledging the significant miscalculation made by Wall Street regarding Trump's trade strategies.

Global markets have recently experienced severe volatility due to Trump's unexpected implementation of punitive tariffs on trading partners. Just a few months prior, Ackman had publicly celebrated Trump's election, predicting that his administration would be the most favorable for economic growth, business, and the United States in decades. However, as the stock market lost nearly $6 trillion in value over two days, Ackman began to reflect on his earlier optimism.

In his tweet, Ackman expressed that he had underestimated the irrationality of Trump's economic decisions, stating, "I thought economic rationality would be prioritized." Like many on Wall Street, Ackman's assumption proved incorrect. On Tuesday, as markets showed signs of recovery, Ackman reiterated his support for Trump's tariff strategy but called for a delay in its implementation, suggesting that negotiations with other countries should be given more time before taking drastic measures.

Many CEOs, private equity giants, and hedge fund managers had initially welcomed Trump's presidency, anticipating that it would unleash the "animal spirit" of American capitalism or at least result in significant tax cuts for the wealthy. Ordinary investors also shared similar expectations, leading to a surge in stock market values. However, they overlooked the obvious: Trump was serious about his threats and intended to overhaul the global economic order by imposing a 10% base tariff on all imported goods and additional tariffs on products from approximately 60 countries.

On Monday, the stock market experienced another tumultuous day, with a false news report briefly causing a rally before Trump's tariff threats sent the market into a tailspin. Trump remained steadfast in his commitment to his tariff plan, even if it meant risking a market collapse. Jason Mudrick, a hedge fund manager, commented that some supporters of Trump were motivated by self-interest and only began to criticize his policies when the tariffs impacted their investment portfolios.

As losses mounted, some prominent Wall Street figures began to cautiously voice their concerns, fearing that speaking out could provoke Trump's wrath. Trump has challenged virtually every aspect of the American system, from large law firms to media outlets and government agencies, leaving no institution untouched. Jamie Dimon, CEO of JPMorgan Chase, warned in his annual letter to shareholders that Trump's tariff policies could be disastrous in the long run, stating that "America First" should not evolve into "America Alone."

Stan Druckenmiller, a billionaire who was once Druckenmiller's boss at the Treasury Department, also expressed his opposition to tariffs exceeding 10%. Ken Griffin, a Republican megadonor and founder of Citadel, echoed similar sentiments, describing Trump's tariff policy as a "huge mistake." However, none of these individuals had as close a relationship with Trump as Ackman, who had become one of the president's most vocal supporters after feeling disillusioned with the Democratic Party's stance on diversity initiatives, immigration, and foreign policy.

In 2023, Ackman had publicly criticized Howard Lutnick, a key proponent of Trump's tariff policy, accusing him of holding positions that would benefit from an economic collapse. Ackman later retracted his statement, acknowledging that his accusation was unfair. Despite the market's volatility, Ackman had previously suggested that other officials should "pick up the phone and call the president to strike a deal," signing off as a "friend of the global economy."

Trump has made no secret of his plans to impose tariffs ranging from 10% to 20% on most of the world. However, many financial executives continued to find reasons to remain optimistic until the tariffs became a reality. Dan Loeb, who manages Third Point, had initially praised Trump's election, predicting increased manufacturing and infrastructure spending. However, he later shared an article from a right-wing think tank, implying that Trump's tariff formula was flawed. Jamie Dimon suggested that tariffs could prompt negotiations, but other prominent Trump supporters, such as Stephen Schwarzman of Blackstone and Marc Rowan of Apollo Global Management, remained silent.

Woody Johnson, the owner of the NFL's New York Jets and one of the wealthiest donors to Trump's campaign, was the only major donor to immediately comment on the tariff policy, stating that despite the harm to his personal investments and the stock market, he still supported the move. Reggie Browne, a partner at GTS and former co-head of ETFs at Cantor Fitzgerald, noted that Trump's actions were consistent with his rhetoric, stating, "Trump says what he means and means what he says."

As the economic outlook becomes increasingly uncertain, Ackman's tone has grown more somber. He revealed that only one of his positions was directly affected by the tariffs—a three-year call option on Nike, which accounted for 1.5% of his holdings. However, the market downturn has severely impacted his London-listed Pershing Square Fund, which has declined by 15% so far this year, indicating that investors are distancing themselves from Ackman. If predictions of a prolonged economic downturn prove accurate, Ackman's plans to list his retail fund may be indefinitely postponed.