Ex-Goldman Sachs CEO Defends Trump’s Trade War on Twitter—Trolling Followed

Lloyd Blankfein

Lloyd Blankfein, former CEO of Goldman Sachs, was in charge during the bank’s fundraising for 1MDB. CHRIS KLEPONIS/AFP/Getty Images

To anyone who has stakes in the financial markets or cares about the economy, President Donald Trump’s new round of tariff hikes on Chinese imports after months of ceasefire with the Middle Kingdom was easily the worst news one could possibly imagine in recent weeks. But, whether you like it or not, the president has at least one of Wall Street’s most prominent figures on his side.

In a pair of tweets on Tuesday night, retired Goldman Sachs CEO Lloyd Blankfein defended Trump’s hard-nosed position during trade talks with China, calling the latest tariff hikes “an effective negotiating tool” to push China into reaching a trade deal.

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“Saying it hurts us misses the point,” he reasoned. “China relies more on trade and loses more. As in a labor strike where management and workers both get hurt, the process may demonstrate relative strength and resolve and where compromise needs to happen.”

In a follow-up tweet, Blankfein added that American consumers may bear some of the cost from higher tariffs, but “U.S. buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but [it’s] part of the process to assert pressure to level the playing field.”

Despite the seemingly sound logic in Blankfein’s argument, not everyone was convinced by his trade war defense.

“Negotiations should rely not only on tools that hurt societies. If one follows your rhetorics, it can be assumed that wars are good negotiating tools,” one Twitter user responded.

Another user compared Blankfein’s analogy between the trade war and a strike to investment banks’ own notorious tool to “level the playing field” during the 2008 Financial Crisis, writing, “Also AAA-rated MBSs are not a bad idea. You can bet against it and make a lot of money, while bringing total destruction on your ‘counter-parties.'”

Some creative minds even took the opportunity to troll Goldman Sachs’ recent scandalous dealing with the Malaysian government (1MDB) fund, which occurred under Blankfein’s leadership.

“Maybe buyers can look to Malaysia for companies to buy from. I’m sure you have a few connections there that can help,” a user commented.

Last Friday, President Trump announced that his administration had decided to raise existing tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent. (This past Monday, China responded with a retaliatory tariff surge on $60 billion of American goods starting June 1.)

The Trump administration’s sudden trade moves have drawn the ire of domestic industry players.

“There’s wide agreement with the president and administration on the overall objectives. We just have a disagreement on the tactics,” Matthew Shay, president and CEO of the National Retail Federation said during a CNBC interview on Tuesday. “Retailers have done everything they can up to now, but when we get to 25 percent on this final fourth tranche, if we go there… It’s going to be difficult for any retailer in the country to avoid passing along price increases to consumers. There’s just not enough leverage and wiggle room left to make that happen.”

Ex-Goldman Sachs CEO Defends Trump’s Trade War on Twitter—Trolling Followed