Global markets will enter dire economic straits if President Donald Trump’s ongoing tariff stance leads to an all-out trade war, warns billionaire investor Steve Eisman.
“The tariffs and the potential for a trade war, I think, is really the only risk to the market right now,” Eisman said. “It’s completely binary, and I really have no way of handicapping it.”
“Nobody wanted World War I, and yet, because of all the reciprocal treaties that existed between countries, they somehow ended up there,” he said. “I don’t think anybody wants a trade war, but it’s certainly possible.”
Though trade talks with China have taken center stage, Eisman argued the process of solidifying trade relations with Europe is “more interesting,” given the EU’s concerns with regulations, as well as value-added tax (VAT). With 27 member states, the EU has to balance myriad agendas, complicating a potential trade deal.
“Negotiating with Europe is like trying to herd cats given the way they’re structured,” Eisman said.
Trump has signalled that the U.S. is not yet satisfied with provisions of the agreement, telling reporters on Tuesday, “We’re talking, but I don’t feel that they’re offering a fair deal yet.”
Trump’s former commerce secretary Wilbur Ross warned that after successful negotiations with China and the UK, the Trump administration may become overconfident in negotiations with the EU, pushing away European allies.
“This is going to be hard, but our country’s goal should be to help make European nations stronger and keep them close,” he added.
