In a contentious interview with Yahoo Finance last week, “Shark Tank” co-host and Canadian mogul Kevin O’Leary defended President Donald Trump’s tariff policies, arguing that they represented “a behemoth negotiation” between the United States and the world.
The appearance came after days of stock-market losses — and, as Yahoo Finance host Madison Mills, who clearly wasn’t a fan of Trump’s policies, noted, “[E]very source on our show this morning [said] that these tariffs will be causing a recession in the United States.”
O’Leary said that this wasn’t certain and that it depended on “how long the tap’s going to be on.”
“We’ve never done this before,” O’Leary said. “We’ve never taken on the entire globe.”
O’Leary noted that there’s “two aspects” to the tariffs: reciprocality and specificity.
Reciprocality, as he noted, would likely “go away pretty quickly” once everyone sat down at the negotiating table.
“The more complex aspect of these negotiations are around the idea of trade imbalances,” he said. “And so, when you put on tariffs to try to fix trade imbalances, it’s difficult, because the largest economy on earth is the United States. So you’re really starting a behemoth negotiation.”
Host Mills interrupted and noted that China had hit the United States with a 34 percent retaliatory tariff, arguing, “We are not getting closer to free trade. We are just getting further into a trade war.”
Is O’Leary right?
“No, China’s a whole different story,” O’Leary noted. “This is about leveling the playing field on a wide range of issues, including [intellectual property] law, access to business, access to courts, being compliant with U.S. regulations on securities. There is a laundry list of grievances with China that have been around since they joined the [World Trade Organization].”
If those were the issues, Mills pressed, why do use tariffs as the tool?
O’Leary responded perfectly: “What tool do you suggest they do when nothing else is working? … China’s different than all the other countries. China has to be dealt with.”
As for the stock-market numbers, O’Leary was unfazed by that, as well.
“By the way, markets correct every 18 months up to 20 percent. You’re watching it happen right now,” O’Leary said.
“It’s not pleasant. You can’t just blame the tariffs for this. These have been very expensive markets now for almost 18 months. Now, they’re having a correction.”
He was also confident that a deal would be reached — even with his native Canada, where Prime Minister Mark Carney is trying to win an election by making Trump the whipping boy — “because there’s a good reason to do it … you’ve got to distinguish the noise vs. the signal. I’ve said this countless times about Trump.”
“This is a giant, nasty negotiation with a little bit of politics,” he added.
“At the end of the day, the president is not an idiot,” O’Leary said. “Neither is [Commerce Secretary Howard] Lutnick or [Secretary of the Interior Doug] Burgum or any of those people negotiating these deals right now. You have to look at the economic opportunity. They’re not idiots.”
This isn’t the first time that O’Leary has come out in favor of Trump’s policies, either. Take his first term, where he argued that Trump should have gotten a lot tougher on both Beijing and the biggest multinational trading block the United States deals with, the European Union.
“Their message is clear: They are going to keep ratcheting up tariffs until the eurozone and China come to the table,” O’Leary said in 2018. “They care about the North American Free Trade Agreement and the Asian trade protocol, too, but these have been pushed to the back burner while they focus on the big dogs, China and Europe.”
Which is what Trump is doing — and what he’s said he’s going to do. He’s right: America is a sick patient that needs medicine, and sometimes medicine has rough side-effects. All of them are the ones O’Leary himself aptly described.
However, these are necessary things for a president to do. The only reasonable way to deal with China is with tariffs; Trump is doing it. The only way to deal with trade imbalances and to get other nations to the negotiating table is through the carrot and the stick; Trump hasn’t made the same mistake as Biden and given other countries carrots with only the mild threat of a potential stick somewhere down the road, but showed that he’s not afraid of using the stick. Markets correct; Trump is riding out whatever correction he has to endure of what were already expensive markets.
This is what America voted for. The interviewer pretends that the only people that matter are Wall Street economists entirely removed from the realities of Main Street. O’Leary lives on both and believes this will be good for both in the long run. He has every reason to believe that, no matter what Yahoo Finance might tell you.
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