The founder and CEO of Citadel, Ken Griffin, expressed deep-seated concerns over steep tariffs proposed by President-elect Donald Trump. Speaking on Thursday at an event sponsored by the Economic Club of New York, Griffin said imposing such tariffs would usher in a dangerous trend toward crony capitalism, a system in which close relationships between business leaders and government officials dominate economic decision-making.
Griffin said that while domestic companies would reap short-term gains when foreign competition is excluded, the long-term implications could be adverse. He said that over time, firms that enjoy benefit from tariffs will become lazy and lose their competitive edge and fail to capture changing needs of the American consumer. As Griffin noted, this could mean that corporate productivity will eventually erode and hurt the economy in general.
The proposed tariffs, especially against China imports, have been an integral part of Trump’s economic policy. He proposed slapping a 20% blanket tariff on all imports and a sterner 60% tariff on Chinese goods. Griffin raised concerns that such protectionist policies could push up production costs and consumer prices, compounding the inflationary pressures still being felt from the pandemic.
Griffin also warned that the tariffs could lead to increased lobbying and pressure from special interest groups in Washington, seeking to extend tariff protections to inefficient American businesses that are unable to compete in the global market. This, he argued, would further entrench cronyism, as industries with political influence secure government-backed advantages at the expense of broader economic health.
In addition to his comments on tariffs, Griffin discussed Citadel Securities’ future, stating that the firm does not plan to go public in the near future. He explained that Citadel is focused on long-term growth and is benefiting from remaining private during a period of rapid expansion. He also noted the challenges posed by the complex regulatory landscape for publicly listed companies.
Griffin’s remarks underscore a broader debate over the effectiveness of protectionist trade policies and their impact on both domestic businesses and global economic stability.