{"id":235241,"date":"2025-05-10T20:24:40","date_gmt":"2025-05-10T20:24:40","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/billionaire-fund-manager-has-sharp-one-word-reaction-to-tariffs-impact-on-manufacturing\/"},"modified":"2025-05-10T20:24:40","modified_gmt":"2025-05-10T20:24:40","slug":"billionaire-fund-manager-has-sharp-one-word-reaction-to-tariffs-impact-on-manufacturing","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=235241","title":{"rendered":"Billionaire fund manager has sharp one-word reaction to tariff's impact on manufacturing"},"content":{"rendered":"


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Many people are debating the pros and cons of tariffs this year after President Donald Trump has made them a cornerstone of his economic policy. <\/p>\n

Those who favor tariffs argue that they\u2019re the best way to encourage companies to build new U.S. factories, boosting manufacturing jobs. Those against tariffs contend that they\u2019re an inflationary consumption tax likely to send the economy into a nosedive.<\/p>\n

So far, the stock market’s reaction to tariffs has been telling.\u00a0<\/p>\n

The S&P 500 sold off sharply after Trump instituted 25% tariffs on Canada and Mexico in February and unveiled worse-than-expected global reciprocal tariffs on April 2. Then, they rallied sharply after Trump paused those reciprocal tariffs in hopes that trade negotiations would significantly remove or reduce them.<\/p>\n

Related: Analyst unveils shocking Fed interest rate cut prediction<\/a><\/strong><\/p>\n

The reason for investors’ disdain for tariffs is pretty straightforward.\u00a0<\/p>\n

Stocks historically follow sales and earnings growth over time, so they do best when policies suggest corporate revenue and profit will climb. Tariffs, however, do the opposite. Import taxes create inflation as companies seek to pass through higher costs associated with them, denting sales growth. And they cause profit margins to slip if the entirety of the cost increases that can\u2019t be passed along to their customers.<\/p>\n

This dynamic isn\u2019t lost on Ken Fisher, the billionaire founder of Fisher Investments, which has $295 billion in assets under management. Fisher has been navigating the markets since the 1970s, and he\u2019s seen his share of economic booms and busts. <\/p>\n

This week, Fisher weighed in on the prospect of tariffs creating manufacturing jobs, responding with a blunt one-word answer that may surprise many.<\/p>\n

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Tariffs have increased recession worries in 2025, and manufacturing may not be the fix.<\/em><\/p>\n

Image source&colon; Michael M&period; Santiago&sol;Getty Images<\/a><\/p>\n<\/figcaption><\/figure>\n

The economy faces an uphill climb<\/h2>\n

The economy grew 3% last summer, but growth has been harder to come by recently. In the fourth quarter, GDP grew 2.4%, and the BEA\u2019s advance estimate for GDP is -0.3% for the first quarter.<\/p>\n

That retreat has increased concern that the economy could be at a tipping point, particularly given we\u2019ve yet to fully experience the potential drag caused by supply chain woes and higher import costs associated with President Trump\u2019s tariff strategy.<\/p>\n

Related: Fed official sends strong message on inflation, jobs<\/a><\/strong><\/p>\n

The economic backdrop is further murky because while unemployment is historically low, it\u2019s been rising, reaching 4.2% last month, up from 3.4% in 2023.\u00a0<\/p>\n

Other signs of a weakening jobs market include a 900,000 drop in unfilled jobs in March, according to the latest JOLTS report, and 602,000 layoffs have been announced so far this year, according to Challenger, Gray & Christmas, up 87% year over year.<\/p>\n

It also doesn\u2019t help matters that those job figures have emerged despite a shift in Fed monetary policy \u2014 to dovish rate cuts last year from hawkish rate hikes in 2022 and 2023. <\/p>\n

The Federal Reserve’s interest rate cuts in September, November, and December don\u2019t appear to have shored up employment, yet they may have caused inflation progress to stall.\u00a0<\/p>\n

CPI inflation last month was 2.4%, matching the level reported last September.<\/p>\n

The economy isn\u2019t yet in a recession, but it could be experiencing stagflation.<\/p>\n

Fisher lambasts the White House’s tariff strategy<\/h2>\n

Few money managers have been as vocal as Ken Fisher regarding the risks associated with tariffs. <\/p>\n

Fisher quickly criticized tariffs after they were announced in early April, referring to them as stupid<\/a> and destructive<\/a>. He\u2019s been pounding the drum that tariffs harm the country more than the countries they impose upon.<\/p>\n

Related: Goldman Sachs unveils tariffs prediction, recession forecast<\/a><\/strong><\/p>\n

Given Fisher’s criticism, it\u2019s probably not surprising that his latest comments debunk the idea that tariffs will revive the manufacturing industry.<\/p>\n

Over the past few decades, companies have increasingly turned to lower-cost production overseas to provide consumers with inexpensive items ranging from toys to clothes to computers. The shift has accelerated with technology that improves inventory and supply chain management.<\/p>\n

As a result, activity at U.S. ports has skyrocketed. The Port of Los Angeles handled 10.3 million containers in 2024, up from 1.6 million in 2000.<\/p>\n

In a recent post on X<\/a>, Fisher was asked if tariffs would bring manufacturing jobs back.\u00a0<\/p>\n

He answered bluntly, \u201cNo.\u201d<\/p>\n

\u201cI understand why a lot of people think they will. They won\u2019t,\u201d explained Fisher. \u201cWe have a very long history of tariffs in this country and all over the world. They do not do this… It\u2019s a little bit of a pipe dream\u2026 It\u2019s mostly just taking a pipe to America.\u201d<\/p>\n

\u201cTariffs are always worse for the company imposing them,\u201d said Fisher. \u201cUnlike what President Trump said, we are not the biggest economy… The Eurozone is one economic block\u2026 it is bigger than we are. We are 25% of global GDP\u2026 The other three quarters can trade amongst themselves… They will take away from us wherever they can to whatever is cheaper to them.\u201d<\/p>\n

More Economic Analysis:<\/strong><\/p>\n