Blankfein Sees U.S. Avoiding `Suicide Pact’ on China Trade Feud
Blankfein says the Trump administration’s tariff threats against China won’t bring about a devastating trade war.
(Bloomberg) -- The Trump administration’s tariff threats against China make sense as a bargaining strategy and probably won’t bring about a devastating trade war, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said.
“That’s what you’d do if it was a negotiating position and you wanted to remind your negotiating counterparty of how much firepower you have,” Blankfein said Tuesday in an interview at the Economic Club of New York. “I don’t think we’re in a suicide pact on this, so I suspect we’re not going to cause the economies to collapse.”
A trade battle is brewing between the world’s two biggest economies as China vows to retaliate against new tariffs planned by U.S. President Donald Trump. While the $50 billion in tariffs already announced were mainly on industrial goods, Trump is now targeting $200 billion in additional Chinese imports, a move that could push up prices for U.S. shoppers on items such as toys, tools and t-shirts.
“I do think -- as some people have commented -- that this is part of a negotiating pattern, that would be my best take,” Blankfein said of Trump’s threats in the interview with Bloomberg Editor-in-Chief John Micklethwait.
In Blankfein’s wide-ranging interview, the Goldman CEO also touched on the immigration debate in the U.S., where Trump’s “zero tolerance” policy separating children from parents crossing the border illegally has sparked protests and calls for a legislative fix. The detentions have created a political crisis for Republican lawmakers trying to hold control of Congress in elections less than five months away.
“Watching now is heart-rending and I wouldn’t be on that side, but thank God I’m not there -- It’s never right against wrong, good against evil,” said Blankfein, who noted how immigration debates have roiled Europe. “Now what do you want to do? Both sides are right.”
On the cryptocurrency front, Blankfein reiterated that Goldman Sachs doesn’t own Bitcoin. He’s previously said he doesn’t consider a digital currency that fluctuates wildly to be a store of value. The price of Bitcoin, the most ubiquitous of the digital currencies, has lost half its value this year.
--With assistance from William Mathis.
To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson
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