^{Kayla Bartkowski | Getty Images}

Ken Griffin’s Take on Trump’s Tariffs: A “Painfully Regressive Tax” on Working Americans

Ken Griffin, the billionaire founder and CEO of Citadel, one of the world’s largest hedge funds, has voiced strong criticism against President Donald Trump’s trade policies, specifically his tariffs on imports. Griffin warns that these tariffs are a “painfully regressive tax” that will have the most significant negative impact on working-class Americans.

Speaking on CNBC’s "Closing Bell", Griffin explained that tariffs act like a sales tax on consumers, placing a greater burden on those who can least afford it. “Tariffs hit the pocketbook of hardworking Americans the hardest,” Griffin remarked. “It’s going to hit those who are working the hardest to make ends meet. That’s my big issue with tariffs. It’s such a painfully regressive tax.”

Griffin’s comments come at a time when Trump has imposed aggressive tariffs on several trading partners, including China, which has escalated tensions in global markets.

The Tariff Impact: A Deep Financial Strain on American Families

In August 2024, Trump rolled out some of the highest tariffs in modern history, with rates as high as 145% on imported Chinese goods. The move sparked wild swings in stock markets, creating uncertainty on Wall Street. As a result, major investors, including Griffin, expressed concern about the long-term economic consequences.

Griffin’s concerns are not just theoretical. Retail prices on everyday goods—especially consumer electronics, clothing, and appliances—have surged due to these tariff hikes. For example, a 10% increase in tariffs on electronics can raise the price of smartphones, computers, and TVs by hundreds of dollars, hitting household budgets directly. While these hikes impact American consumers, the situation is equally challenging for American businesses that rely on imported materials to produce products for domestic markets.

Furthermore, President Trump later announced a 90-day tariff pause for many goods from some countries, except for China, as negotiations continued. However, this has done little to alleviate the financial strain on consumers, particularly for those in lower-income households.

Griffin’s Perspective: A Risk to U.S. Economic Growth and Global Standing

Although Ken Griffin is a well-known Republican supporter and a megadonor to political campaigns, his criticism of Trump’s trade policies highlights a significant divide within the business community. Griffin, whose hedge fund manages over $65 billion in assets, has expressed concern that these tariffs could harm the U.S. economy in the long run.

“The reason the American voters elected President Trump was because of the failed economic policies of Joe Biden and the inflationary shock that reduced the real incomes of every American household,” Griffin remarked. “The president really does have to focus on managing inflation, because I think it’s front and center, the primary scorecard that American voters are going to think about when it comes to this midterm election.”

Despite his support for the president’s broader economic agenda, Griffin remains wary of the potential downside of tariffs. He believes that, while trade policies like tariffs are designed to protect American industries, they may harm the country’s overall economic stability and the U.S. government's bond market.

Potential Risks: Inflation, Stagflation, and Economic Slowdown

Griffin also raised concerns about the economic risks associated with Trump’s trade policies, including the potential for stagflation. Stagflation—a combination of high inflation and economic stagnation—could emerge if tariffs contribute to rising prices while simultaneously slowing down economic growth.

“There's a modest risk of stagflation,” Griffin noted, as higher tariffs could create both inflationary pressures and slow the economy. This situation would pose a significant challenge for U.S. businesses, especially small and medium-sized enterprises that operate on tight margins and depend on affordable imported goods to keep costs down.

The future trajectory of the U.S. economy is now closely tied to how President Trump’s economic policies evolve in the coming months. Key elements of his economic program include trade, tax cuts, and deregulation, but it remains uncertain whether these will collectively lead to the growth that the U.S. economy desperately needs.

The Bigger Picture: Trump’s Economic Agenda and Its Long-Term Impact

As Griffin pointed out, the effectiveness of the Trump administration’s economic program hinges on whether these three key pillars—trade, tax reform, and deregulation—can come together to provide sustainable economic growth. "The question is, will all three of those come together to give us the growth that we need in our economy? That’s the real question we’re going to face over the next two years," Griffin said.

The future remains unclear as we await more developments in the ongoing trade negotiations and policy shifts. For now, however, the working class continues to bear the brunt of the financial fallout from tariff policies, with prices climbing on essential goods and wages lagging behind inflation.

‍