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Donald Trump’s commerce warfare dangers sparking capital flight from the US because the president’s unpredictable tariff insurance policies trigger “enormous” harm, hedge fund Elliott Administration has warned.
The activist agency, based and co-led by Republican megadonor Paul Singer, stated in a letter to buyers seen by the Monetary Occasions that the Trump administration’s financial programme might tarnish the enchantment of the greenback and of doing enterprise within the US.
That will danger “capital flight” and a “significant” fall in worth of the foreign money and US belongings, Elliott stated in a bit of the late April letter titled “Bonfire of the American era?”
Elliott declined to remark.
The warning comes after Trump’s tariff blitz triggered weeks of turmoil in monetary markets, and marks the newest criticism of the White Home from the $73bn-in-assets hedge fund, which earlier this 12 months stated the president’s embrace of cryptocurrencies was fuelling a speculative mania.
The tariffs contemplated by the administration have been “likely more stringent than the ones that exacerbated the Great Depression in the 1930s”, Elliott wrote within the letter, which was despatched to buyers after Trump introduced a 90-day pause to his sweeping “reciprocal” tariffs on US buying and selling companions final month, however earlier than this week’s US-China commerce deal fuelled an extra restoration in markets.
“Such tariffs will generate a lengthy, complicated process of negotiation, retaliation and uncertainty for businesses around the globe” that would trigger “enormous” harm, the agency added.
Singer has been a serious donor to Republicans in recent times, donating $56mn to the occasion’s candidates within the final election cycle, in line with web site OpenSecrets.
A small group of high Wall Avenue figures have spoken out in opposition to Trump’s financial insurance policies. Citadel founder Ken Griffin, one other main Republican donor, stated final 12 months that the president’s tariff plans would put the US “on a slippery slope to crony capitalism”. Invoice Ackman, a supporter of Trump within the 2024 presidential marketing campaign, has described the tariffs as “a major policy error”, whereas billionaire investor Stanley Druckenmiller has stated he doesn’t help tariffs exceeding 10 per cent.
Elliott additionally stated within the letter that the sell-off that adopted Trump’s “liberation day” tariff bulletins induced “capital destruction on a large scale”.
The S&P 500 index was down by as a lot as 15 per cent in 2025 in early April, however has since recovered all of these losses as commerce tensions receded.
However, Elliott stated the episode highlighted the “brittleness” of a “massively overvalued stock market”.
The hedge fund was up about 2.5 per cent within the first quarter of the 12 months, in line with figures within the letter. The turmoil sparked by tariffs was prone to create larger alternatives for activist investing, as market stress “exposes weakness at companies in need of course correction”, the agency added.
