'Ticking time bomb': Pro-Trump investor says trade war could end GOP control of Congress
On Wednesday, Federal Reserve Chairman Jerome Powell warned that President Donald Trump's tariffs could spike inflation and harm economic growth. But one investor who has publicly backed Trump believes there could also be a political cost next year.
In a CNN interview, Canadian investor Kevin O'Leary — also known for his role on the CNBC show "Shark Tank" — opined that most of Trump's tariffs would be quickly reversed after negotiating with trade partners. But he was less optimistic about the prospect of a deal being worked out with China. And he warned that the longer Trump's standoff with China went on, the worse his party would fare in next year's midterm elections.
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"Let's be pragmatic. The midterms are less than 18 months away," O'Leary said. Trump can't have this on his back at the midterms. He risks losing a majority. So he's got to resolve this quickly, and that's why they're going at breakneck speed."
O'Leary went on to say that no prior administration has tried to negotiate trade deals with "60-plus countries at once," but believed Trump would still be able to stave off negative consequences from tariffs with Canada and Mexico. He worried that the ongoing standoff between Trump and Chinese President Xi Jinping would result in lasting economic and political consequences.
"The big deal here is China. That's the behemoth. We're the biggest market. Whey know it. So much of what's made in China goes to the United States. And so that's really the one to focus on," he said. "I think the rest is a sideshow because it's going to get resolved. Probably equivalent tariffs or no tariffs at all. But the China deal, that's a big deal."
"This is just posturing. We've got two behemoth leaders that don't want to look like they're weak," he added. "I get it, but this is a ticking time bomb, and it's gotta get resolved. There's no question about it."
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Watch the segment below, or by clicking this link.
