Ken Griffin: One of Trump’s billionaire supporters has harsh words for the president about his trade war

CNN
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Citadel CEO Ken Griffin, a billionaire supporter of President Donald Trump and a megadonor to Republican candidates, had some unusually harsh phrases for the president about his commerce struggle: It’s hurting America’s standing on the earth and eroding the nation’s model.

“The United States was more than just a nation. It’s a brand. It’s a universal brand, whether it’s our culture, our financial strength, our military strength …. America rose beyond just being a country,” Griffin stated Wednesday on the Semafor World Economic system Summit in Washington. “It was like an aspiration for most the world. And we’re eroding that brand right now.”

Griffin, founding father of one of many largest hedge funds on the earth, stated that merchants are involved about parking their investments in the US — notably US Treasury bonds — as a result of Trump’s tariffs have destroyed religion that America will stay a trusted and rational actor in international monetary markets.

“If you think of your behavior as a consumer, how many times do you buy a product with a brand on it because you trust that brand?” Griffin stated. “In the financial markets, no brand compares to the brand of the US Treasuries — the strength of the US dollar and the strength and creditworthiness of US Treasuries. No brand came close. We put that brand at risk.”

Treasury bonds have traditionally been the final word safe-haven asset, backed up by the total religion and credit score of the US Treasury. When the going will get robust, traders usually look to the perceived security of Treasury bonds to park their investments whereas riskier and extra risky shares take a tumble.

However that hasn’t occurred in current months. As Trump’s commerce struggle has escalated, traders have feared that the US may inflict vital harm to the worldwide economic system — however much more hurt to its personal economic system and maybe irreparable harm to its personal repute.

JPMorgan Chase CEO Jamie Dimon had comparable remarks in his annual shareholder letter earlier this month. Dimon stated America’s “extraordinary standing” on the earth was constructed on the energy of its economic system, navy and morals. However tariffs and Trump’s “America First” overseas coverage may undermine the US’ particular place on the earth.

“America First is fine, as long as it doesn’t end up being America alone,” Dimon stated. “If the Western world’s military and economic alliances were to fragment, America itself would inevitably weaken over time.”

Griffin on Wednesday likened America’s model to a well-known dressmaker, a well-made purse or a dependable automaker. But when the businesses that make these manufacturers have a public scandal, Griffin stated that reputational harm could be almost inconceivable to restore.

“You know, you can buy like a similar dress with no name for less money, but you want the dress that you think is going to not fall apart in two weeks,” Griffin stated. “It can take a very long time — a very long time — to remove the tarnish on a brand.”

Traders have turned their backs on US property. The greenback this week hit its lowest stage in three years. US crude oil has tumbled as traders worry demand may sink sharply in a recession. Treasury yields, which commerce in other way to costs, have surged in current weeks. And US shares, regardless of a current two-day rally, have nonetheless erased almost $7 trillion of market worth for the reason that inventory market’s peak reached in mid-February, in response to S&P Dow Jones Indices.

Griffin stated that exhibits Trump and his advisers have their work reduce out for them to proper the perceived wrongs of the damaging commerce struggle.

“The president and the secretary of the treasury and the secretary of commerce need to be very thoughtful that when you have a brand, you need to behave in a way that respects that brand that strengthens that brand,” Griffin stated. “Because when you tarnish that brand? It can be a lifetime to repair the damage that has been done.”