Bill Ackman warns of economic nuclear winter due to Trump’s tariffs

In early April 2025, the United States experienced significant turmoil in its stock markets due to the implementation of tariffs by President Donald Trump. These tariffs, described as the largest since the 1930s, prompted widespread concern and uncertainty among traders, resulting in major losses across key global financial indices. The uncertainty stemmed not only from the tariffs themselves but also from questions about their permanence and intent. This led to fears about the potential stalling of global trade and economic growth. Many industries, particularly banking and manufacturing, saw hundreds of billions wiped off their market value as a result. Bill Ackman, a billionaire hedge fund manager and Trump supporter, expressed deep concern about the implications of these tariffs. He labeled the situation as an impending economic crisis, coining the term 'economic nuclear winter' to describe the severe repercussions he anticipated if the administration did not reassess its strategy. Ackman criticized the formula used by the Trump administration to calculate tariff rates which he argued misrepresented the scale and impact of international tariffs, claiming they made other nations' tariffs appear four times larger than they actually were. His remarks indicated a broader mistrust of the administration’s economic strategy, suggesting that business leaders worldwide were losing confidence in the U.S. government's stability and reliability as a trading partner. Moreover, the reactions from other nations, particularly those in Southeast Asia, highlighted the far-reaching consequences of Trump’s tariffs. With a significant portion of their economies dependent on U.S. trade, ASEAN countries faced a paradox of needing to align with U.S. economic policies while simultaneously fearing the erosion of free trade. Regional leaders proposed measures such as slashing tariffs on U.S. goods to mitigate potential damages, illustrating the desperation felt within the region. The economic interdependence greatly complicated the diplomatic landscape and the responses reflected a hope to appease the U.S. despite acknowledging the adverse effects. As tensions escalated, some observers pointed out the possible end of an era characterized by rules-based globalization. Trump's approach to trade, weighted heavily on tariffs and antagonism towards long-established trade agreements, has raised alarms that the global economic stability might be at risk. Many experts warned this could lead to further isolationism and protectionism, ultimately making countries less safe. The market turmoil underscored a pivotal moment in international trade dynamics, leaving stakeholders around the globe to ponder the future of U.S. leadership in world trade.