Can Trump's billionaire backers pull him back from the tariff cliff?
Many of America's billionaires and millionaires thought they knew how they would profit from a second Trump term: There would be tax cuts and deregulation and an end to bothersome government investigations.
In other words, a White House sedulously attuned to their interests.
What they didn't count on, however, was a chaotic and nonsensical tariff policy that threatens to plunge their investment holdings into a bear market — or in some cases, has already done so — and to unravel the global economy in which they made all their money.
Now, many of his erstwhile supporters among America's plutocrats are screaming for mercy. In interviews and social media postings, and in one case even via a federal lawsuit, they've been calling on him to roll back his tariff plans or at least to pause them for several months.
Is he listening? So far, he hasn't indicated a change in strategy. Whether Trump is open to persuasion or his White House sits behind a figurative barrier against criticism, like the Coulomb barrier that repels protons from an atomic nucleus until they reach a high energy level, isn't known.
Criticism of the tariffs by Trump's wealthier supporters has emerged as the investment markets continue to reel over Trump's tariff plans and his apparent resistance to moderating the levies or his anti-free-trade rhetoric.
One can't pretend that Trump's backers haven't been speaking clearly. Let's listen in on the backlash from billionaires and the billionaire-adjacent.
Among the most vociferous is Ken Langone, the co-founder of Home Depot. Langone, whose net worth is estimated at about $9.5 billion by Forbes, is a Trump backer whose political contributions have gone mostly to Republicans, including a $500,000 donation last year to the GOP's Senate Leadership Fund.
In an interview with the Financial Times published Monday, Langone decried Trump's tariffs as too large, imposed too hastily, and based on an incoherent mathematical formula.
Langone told the FT that he thought Trump was 'poorly advised.' He questioned the math used by the White House to calculate the 'reciprocal tariffs' Trump announced on April 2. 'I don't understand the goddamn formula,' he said. 'I believe he's been poorly advised by his advisors about this trade situation — and the formula they're applying.'
Focusing on how the formula produced a 42% tariff on goods from Vietnam, he called that figure 'bulls—. ... Forty-six percent on Vietnam? Come on! You might as well tell them, 'Don't even bother calling.'' He also called the 34% tariff on China 'too aggressive, too soon.' He spoke before Trump threatened to add another 50% to tariffs on goods from China if it pursued plans to retaliate with higher tariffs on U.S. goods.
Langone is not alone in questioning the April 2 formula. Because of a definitional error, according to economists Kevin Corinth and Stan Veuger of the conservative American Enterprise Institute, the formula yielded tariffs that are roughly four times too high. The proper rate for Vietnam, they calculated, should be 12.2%, not 46%.
'The formula the administration relied on has no foundation in either economic theory or trade law,' Corinth and Veuger wrote. 'But if we are going to pretend that it is a sound basis for US trade policy, we should at least be allowed to expect that the relevant White House officials do their calculations carefully.'
Among others weighing in on the tariffs was Stanley Druckenmiller, a revered investment manager who once worked for progressive philanthropist George Soros, and was once the mentor and boss of Scott Bessant, Trump's treasury secretary. In the 2020 election, Druckenmiller contributed $250,000 to the GOP's Senate Leadership Fund.
In an interview Sunday with CNBC that he later cited in a tweet on X, Druckenmiller said tariffs shouldn't exceed 10% to avoid triggering retaliatory tariffs by targeted countries. Trump's tariffs start at 10% and go higher from there.
'What Trump unveiled Wednesday,' tweeted billionaire investment manager Ken Fisher, who has contributed to Republicans and Democrats, 'is stupid, wrong, arrogantly extreme, ignorant trade-wise and addressing a non-problem with misguided tools. ... On tariffs Trump is beyond the pale by a long shot.'
Fisher called the tariff formula 'ridiculous' and predicted that 'if GOP congress members don't get Trump's tariffs reigned in pretty quickly, the midterms ... will be a blood bath for them big time.'
Among the most vociferous critics of the tariffs has been billionaire hedge fund manager Bill Ackman, who was one of Trump's most steadfast supporters during the presidential campaign and since the election. But he drew the line at the tariff announcement.
Referring to the plan to begin imposing reciprocal tariffs on Wednesday, Ackman tweeted that if 'on April 9th we launch economic nuclear war on every country in the world, business investment will grind to a halt, consumers will close their wallets and pocket books, and we will severely damage our reputation with the rest of the world that will take years and potentially decades to rehabilitate.'
He added, 'What CEO and what board of directors will be comfortable making large, long-term, economic commitments in our country in the middle of an economic nuclear war? I don't know of one who will do so.' He urged Trump to 'call a time out.'
Business leaders have also begun speaking out. As I reported earlier, JPMorgan Chase CEO Jamie Dimon, who earlier this year counseled Americans that Trump's plans for relatively modest tariff increases were no big deal — 'Get over it,' he advised — changed his tune in a his annual letter to JPM shareholders published Monday. There he observed that 'the recent tariffs will likely increase inflation and are causing many to consider a greater probability of a recession.'
Wilbur Ross, an investment banker who served as Commerce Secretary during Trump's first term, indicated that he was unnerved by the magnitude of the planned tariff hike.
'It's more severe than I would have expected,' he told the Financial Times. 'Particularly the way it is impacting Vietnam, China and Cambodia is more extreme than I would have thought.' He added, 'It's hard to deal with uncertainty. Fear of the unknown is the worst for people and we are in a period of extreme fear of the unknown.'
Trump's tariff policy has exposed a serious rift within his inner circle, with conflict between his advisor Elon Musk and Peter Navarro, Trump's hard-line trade counselor, breaking into the open.
Speaking on CNBC Monday — after Musk called for 'a zero-tariff situation, effectively creating a free-trade zone between Europe and North America' — the opposite of Trump's approach — Navarro called Musk 'not a car manufacturer' but a 'car assembler,' referring to Tesla, the electric vehicle maker Musk controls. Navarro's goal was to imply that Tesla is dependent on imported parts that would be subject to the new tariffs.
Musk responded with tweets in which he called Navarro 'truly a moron' and 'dumber than a sack of bricks.' The assertion that Tesla relies on imported parts, he wrote, is 'demonstrably false.'
The Trump White House downplayed the conflict as a minor spat. 'Boys will be boys, and we will let their public sparring continue,' White House press secretary Karoline Leavitt said Tuesday.
Another path of attack on Trump's tariffs was opened last week by the New Civil Liberties Alliance, a conservative legal group that has been funded by right-wing sources including the Koch network, the Linde and Harry Bradley Foundation and the Sarah Scaife Foundation.
The Alliance filed a lawsuit last week asserting that the law Trump cited as giving him power to set tariffs — a power the constitution reserves for Congress — does not, in fact, provide that authority.
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