- ARK Make investments founder Cathie Wooden is betting on President Donald Trump’s tariffs: The chaos could possibly be a setup for commerce offers, and any financial slowdown could possibly be the factor that pushes the administration and central financial institution into motion, she wrote in a current word.
ARK Make investments founder and chief government Cathie Wooden, famed for her bets on Tesla, seems to be betting on the president’s tariffs, too.
“While many observers fear that the Trump tariff policy is a recipe for economic and geopolitical disaster, we believe that what looked at first glance like the largest and most regressive tax increase in U.S. history could turn out to be quite the opposite,” Wooden wrote in a word on Friday.
President Donald Trump introduced a sweeping tariff regime on so-called Liberation Day that despatched the inventory market spiraling and sparked chaos within the bond market. He later introduced a 90-day grace interval whereas elevating tariffs on China however conserving the door open to a deal.
However Treasury Secretary Scott Bessent’s obvious elevation because the lead on commerce negotiations over different administration officers turned Wooden bullish.
That comes after studies stated Commerce Secretary Howard Lutnick would play “bad cop,” whereas commerce advisor Peter Navarro can be sidelined.
So “what once seemed like a chaotic situation based on incomprehensible ‘reciprocity’ calculations could have been a setup—premeditated or otherwise—for serious negotiations that will lead to lower tariffs and non-tariff barriers, neither of which would have been possible without the shock therapy that President Trump administered,” Wooden wrote within the word dated April 11.
She additionally talked about Elon Musk, who, she famous, was “still influential” within the administration and holds a zero-tariff stance. Navarro and Musk clashed over tariffs.
Wooden isn’t the primary to be crucial of the reciprocal tariff calculation, or the primary to recommend this might have been the technique all alongside. And late Friday night time, one other tariff reprieve was declared: Smartphones, computer systems, semiconductors, and extra have been exempt from tariffs.
However combined alerts adopted. Lutnick stated exemptions gained’t final and tariffs have been coming later, and Trump posted on his social media platform that nobody was “off the hook” on tariffs. Nonetheless, Monday started with a tech rally, and the state of affairs has considerably calmed.
Wooden stated that all through current volatility within the inventory and bond markets, she held that the president was aiming for sturdy financial progress and a robust marketplace for the second half of the 12 months—an expectation she had earlier than the tariff whiplash started, coming off what she referred to as a “rolling recession.”
A tariff-induced shock may push the administration and the Federal Reserve, which is in wait-and-see mode, to intervene extra forcefully with fiscal and financial stimulus.
“Now that much of the economy has seized up in response to the fear of tariffs, the drop in activity is likely to be more severe than otherwise would have been the case, a clarion call for tax cuts, deregulation, and lower interest rates,” she wrote.
ARK Make investments didn’t reply to Fortune’s request for additional remark.
This story was initially featured on Fortune.com
