Billionaire hedge fund manager John Paulson has expressed his support for Donald Trump’s trade policy, dismissing concerns from Wall Street about the potential negative impact of tariffs on the economy. In an interview with the Financial Times, Paulson stated that “strategic tariffs” could be a useful tool to level the playing field and address trade imbalances. He praised Trump for addressing these issues, even though he acknowledged that the candidate may not always articulate his ideas effectively.
Trump recently threatened to impose tariffs of 100% on imports from countries that move away from using the US dollar. Some economists have warned that increased tariffs could harm consumers, slow down economic growth, and lead to inflation. The Tax Foundation, which advocates for lower taxes and a simpler tax code, has also argued that Trump’s proposed tariffs would increase costs for US businesses and shrink the economy.
Paulson’s current stance differs from his previous comments in April when he described tariffs as a “blunt tool” and expressed opposition to decoupling from China. However, he now believes that Beijing has become more adversarial towards the US and there is a need to decouple economically.
Paulson cited personal experiences with his investments as evidence of unfair trade practices. For example, one of his investments in Steinway Musical Instruments faced a 30% tariff when selling woodwind instruments in China while facing only a 3% tariff in the US for similar products.
Regarding immigration policies proposed by Trump, Paulson supported fair immigration but also backed deporting criminals. He criticized Democratic nominee Kamala Harris’ plans to increase corporate taxes and capital gains tax as well as implementing new levies on unrealized gains for high-net-worth individuals.
Despite speculation about him potentially serving as Treasury secretary under a Republican administration if Trump wins in November, Paulson noted potential conflicts of interest due to his holdings. One such conflict involves his preferred shares in Fannie Mae and Freddie Mac – state-backed groups guaranteeing most US mortgages – which he believes should become private companies again.
Paulson argued that under a Trump presidency there would be an increase in natural gas production, manufacturing growth, and improved government efficiency. The Republican nominee has pledged to appoint Elon Musk to head an administration audit commission aimed at implementing significant regulatory reforms.
