Tariffs imposed by the US are stirring concerns over a potential recession, but the long-term effects remain uncertain.
O'Leary Ventures chairman Kevin O'Leary argues that the tariffs, especially those targeting China, are part of a broader strategy to address trade imbalances and unfair practices.
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How do you continue to be an advocate for these tariffs, given the selloffs we're seeing? Given that I have had every source on our show this morning say that these tariffs will be causing a recession in the United States.
They don't know that yet. They don't know how long the taps are going to be on. We've never done this before. We've never taken on the entire globe. Usually it's done in trade agreements with specific countries, such as NAFTA, which was Canada and Mexico, or European Union situation. This is unique, over 60 countries. Now, there's two aspects to these tariffs. Number one is reciprocity against tariffs from one country to another, based on products and services that are specific. So if you're charging a 20% tariff in India, it's going to be reciprocated in the United States, and those go away pretty quickly. That actually leads to fair trade. The more complex aspect of these negotiations are around the idea of trade imbalances. And so when you put on tariffs to try and fix trade imbalance, it's difficult because the largest economy on Earth is the United States. So really you're starting a behemoth negotiation. And it's happening in every country. You highlighted Canada, but you might as well talk about Britain, or even Switzerland, where I am right now, where they have over 30% tariffs imposed 48 hours ago. And so you can assume that behind the scenes are two spheres of negotiations. One is, let's try and reduce the imbalance of trade by buying more stuff from the United States. That's one signal. And the other, which is very easy to fix, is simply remove all tariffs. If you're going to have reciprocal tariffs at 20%, 30%, 40%, just get rid of them, bring them down to zero. But then...
But Kevin, as of this morning, with the 34% retaliatory tariff from China to the United States, we are not getting closer to free trade. We're just getting further into a trade war.
No, China's a whole different story. This isn't about trade war with China. This is about leveling the playing field on a wide range of issues, including IP law, access to business, access to courts, being compliant with US regulations on securities. There is a laundry list of grievances with China that have been around since they joined the WTO. And none of the administrations previously have ever dealt with China. This is... being dealt with for the first time. So this has nothing to do with just tariffs. I mean, right now, I can't litigate...
But that's the tool that the administration is using. Why are tariffs the correct tool if, to your point, these have nothing to do with tariffs?
What tool do you suggest they do when nothing else has worked?
Well, I'm not the president. It's not my job.
Well, exactly. So let him do his work. China's different than all the other countries. China has to be dealt with.
But it's not working, right?
I am, listen, I, look, I'm having lots of problems with China, as are millions of other companies in the United States that try to do business there. They do not play by the rules. They're going to have to start doing it pretty soon. That's a different conversation. You want to talk about the markets correcting? Yes, they are. By the way, markets correct every 18 months, up to 20%. You're watching it happen right now. It's not pleasant. You can't blame just the tariffs for this. These have been very expensive markets now for almost 18 months. Now they're having a correction. I think what matters is, is this a recession signal? Yes or no? And how long will these tariffs be on? I would say 50% of these tariffs across these 60 countries will be negotiated pretty quickly, including the Canadian situation you made details on. Canada's different because they're in the middle of an election. Carney's not an elected official. He has no mandate from the Canadian people. He's just an interim prime minister when they threw out Justin Trudeau a few weeks ago. He's got to get elected first, so he's going to say anything he possibly can to try and distract Canadian voters from the fact that his party bankrupted the country. 25% of Canadians live in poverty. They have had no GDP growth for 10 years. There's no investment capital in Canada anymore, and the dollar's lost 41% of its value. Canadians can't go to the United States because they can't afford it under Carney's leadership and his party. So those are different issues, too. There's a lot of things going on at the same time.
