Billionaire investor and hedge fund manager Bill Ackman has called for a strategic pause in tariffs, believing that time would ultimately favour the United States of America in ongoing US-China trade negotiations.
Ackman, CEO of Pershing Square Capital Management, challenged conventional wisdom regarding China's advantage as a long-term strategic player in the current trade dispute. In a detailed analysis on social media platform X (formerly known as Twitter), he wrote, "Some have suggested that because China takes a very long-term view, China can 'win' a trade war with the U.S. which, according to the conventional view, is a much shorter-term player than China. The problem with this assessment is that the longer the tariffs persist, the more rapidly every company that has a supply chain based in China relocates it to India, Vietnam, Mexico, the U.S. or some other country."
Ackman's comments come at a time when there are growing concerns regarding the economic fallout of the ongoing tariff tussle brought about by US President Donald Trump on other countries. Last month, the Trump administration hiked duties on Chinese imports, with Beijing retaliating by matching duties on American goods.
Ackman argued that these extreme tariff levels are creating a major situation for businesses that hold manufacturing operations in China. "Unless it is clear that a company can continue to source from China on economically viable terms, it must leave the country," he wrote, highlighting that the tussle affects both American and international businesses.
Concerned for the smaller enterprises caught in the US-China tariff crossfire, he added, "The China tariffs are very damaging in the short term to companies that rely on China for a large percentage of their goods or for parts to make their products. This is particularly true for small companies who don't have the wherewithal to weather the storm."
Ackman suggests that time is of the essence because even if high tariffs are currently pressuring American businesses, a strategic pause would shift the time advantage to the United States. "If the tariffs are paused, the pressure on the U.S. economy is largely removed and time becomes our friend and China's enemy in the negotiation," Ackman wrote.
He suggests that even a temporary pause — of even 180 days — would not show weakness but instead create space for meaningful negotiations while putting the onus on China to reach a permanent agreement. "Both countries know that the 145% tariffs have to come down now. They are just trying to manage the diplomacy in such a manner to make clear that it is a mutual decision as opposed to one country 'going first'," he added.
He buttressed his point by stating that it would take Herculean measures from China's side to stem the negative perception regarding the country's ways of doing business. He wrote, "The only thing that stops the deluge is China eliminating its tariffs, non-tariff barriers, market access restrictions, SOE subsidies, and IP theft etc. that make China a bad place to do business."
Suggesting that the trade war has damaged China's position in global supply chains, Ackman said, "There is no board of directors or management team who will ever again feel comfortable relying on China for a major portion of their supply chain. The damage has been done."
Ackman summed up with a direct appeal to President Trump, saying, "So @realDonaldTrump, let's pause the China tariffs and take the pressure off American companies, and you will have all the time and leverage in the world to negotiate a great deal with China."
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