President Trump’s trade war with China just got a plug from Lloyd Blankfein, the ex-CEO of Goldman Sachs.
In a late-Tuesday tweet that surprised some Wall Streeters, Blankfein threw his weight behind the White House’s proposed hike of tariffs on $200 billion worth of Chinese goods — even though there’s concern that American shoppers will end up footing the bill.
“Tariffs might be an effective negotiating tool. Saying it hurts us misses the point,” he tweeted. “China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.”
Prominent opponents of the tariffs have included none other than Gary Cohn, a former president of Goldman Sachs under Blankfein. Cohn quit as head of Trump’s National Economic Council in March 2018 after Trump imposed the first US tariffs on steel and aluminum imports.
Blankfein, who stepped down from running the Wall Street investment bank last year, has been critical of some of Trump’s policies in the past, most notably when the White House pulled out of the Paris climate agreement.
While the New York Post-loving banker cheered the tariff hike, he also admitted that US consumers could get slammed by a trade war.
“As to who ultimately bears the tariffs cost: US buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but part of the process to assert pressure to level the playing field.”