Bill Ackman says Trump's tariff threat needs to be 'properly understood', markets 'should be up not down'

Donald Trump, on Truth Social, the platform owned by him, said earlier on November 26 that he would impose 25% tariffs on all products from Mexico and Canada, in an effort to clamp down on migrants and illegal drugs finding its way into US from across borders.

Billionaire hedge fund manager Bill Ackman said if 'properly understood', President-elect Donald Trump's plan to impose 25% tariff on Mexico and Canada, along with additional 10% tariff on China, starting January 20 should be a positive trigger for US stock markets, and markets 'should be up not down.'

Ackman said Trump will use tariffs to 'achieve economic and political outcomes' that are in the interest of America. "In other words, @realDonaldTrump is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America, fulfilling his America first policy," Ackman said in a social media post on X.

Donald Trump, on Truth Social, the platform owned by him, said earlier on November 26 that he would impose 25% tariffs on all products from Mexico and Canada, in an effort to clamp down on migrants and illegal drugs finding its way into US from across borders. Ackman said this tariff will not be implemented once US and Canada act on the drug trade and illegal immigration.

Mexico is America's largest trading partner, followed by Canada and China, as of September.

The Canadian dollar fell to a four-year low and Mexican peso was at its weakest since 2022 after the comment, while offshore Chinese yuan too was under pressure. While Japan's Nikkei has been sharply lower, rest of Asian equities is mixed, and US index futures slipped after a record close overnight. Read More

Gold prices held steady after a 3 percent drop in the previous session, supported by increased safe-haven demand following President-elect Donald Trump’s pledge to impose tariffs on all imports from Canada, Mexico, and China.

"To be clear, according to Trump the 25% tariffs will not be implemented, or if implemented will be removed, once Mexico and Canada stop the flow of illegal immigrants and fentanyl into the US," Ackman posted, calling it a 'great way' to effect foreign policy changes even before taking office.

Liu Pengyu, spokesperson for Chinese embassy in US said cooperation is 'mutually beneficial', and 'no one will win a trade war or a tariff war'. Pengyu said the counter-narcotics authorities of both China and the US have been in regular communication, and China has 'responded to US request for verifying clues' in certain cases. "All these prove that the idea of China knowingly allowing fentanyl precursors to flow into the United States runs completely counter to facts and reality," he added.

Chris Wood of Jefferies too had hinted that President-elect is likely to use tariffs are a leverage, and a 60% tariff on China is 'unlikely'. Read More

"I am sceptical if Trump will put 60% tariff on China, if he does, it will increase the cost of goods. I believe this is part of his negotiation tactics. While he will raise tariffs, I doubt if it will be 60%," Chris Wood had said earlier in November.