Citadel founder Ken Griffin is sounding the alarm on President Donald Trump‘s tariff policies, warning they have “unleashed an era of crony capitalism” where the government picks “winners and losers” in the economy.
What Happened: “Tariffs open the doors to crony capitalism,” Griffin told Politico at the Milken Institute’s Global Conference. “I thought that would play out over the course of years. It’s terrifying to watch this play out over the course of weeks.”
The hedge fund billionaire’s criticism reflects growing concerns among Wall Street executives that the escalating trade war could derail economic growth despite the administration’s promises of prosperity. His comments come as the U.S. grapples with a record $140 billion trade deficit in March.
Griffin, a longtime GOP megadonor, expressed particular concern about the administration’s selective exemptions for certain industries. The dollar’s recent decline, he noted, will soon weaken American consumer purchasing power.
“Whether it’s a flat-screen TV or a new laptop, your dollar is just not going to go as far,” Griffin said. “This starts unfolding in the next couple weeks.”
Why It Matters: Bank of America‘s chief investment strategist Michael Hartnett predicts tariffs may be reduced this quarter, warning that Treasury yields above 5% could jeopardize the deficit-financed growth strategy. JPMorgan Chase recently raised its recession odds to 60% from 40%, citing supply-chain disruptions.
The impact is already being felt across sectors. Ford Motor Co. CEO Jim Farley announced tariffs could cost the automaker $1.5 billion, forcing the company to withdraw its earnings guidance. Major ports report Chinese shipments have “essentially ceased,” with retailers facing five to seven weeks of inventory before shortages emerge.
Despite these concerns, some Trump allies remain optimistic. Former presidential adviser Gary Cohn told Milken Conference attendees, “We’ve lived through depressions. We’ve lived through recessions… Every time, when we thought it was really bad, it got a lot better.”
For Griffin, who has previously criticized Trump, the risk is clear: “We all want to see the president succeed… There’s that fine line between constructive criticism and just being toxic.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.